Supply and consumption on the up in southern regions

The southern market remained vivid in 2021, photo le Toan

In Ho Chi Minh City, the market experienced a sharp decline in supply and consumption in most segments in 2021. Meanwhile, Dong Nai province continues to lead the supply of new townhouses and villas. The market recorded positive signals from villas, townhouses, and shophouses in resort projects in the hospitality segment.

According to DKRA Vietnam, the land plot segment in 2021 in Ho Chi Minh City and neighbouring provinces recorded 46 projects for sale with a supply of over 6,200 products.

Consumption reached nearly 4,700 units, equivalent to 76 per cent of new supply. The land plot market in the vicinity continues to occupy a key position in the total new supply due to the increasingly scarce land fund in Ho Chi Minh City. For example, Long An and Dong Nai are the two provinces leading the supply of the whole market with about 68 per cent of the total new supply.

The apartment market recorded 41 projects for sale (more than 21,000 units) in 2021, concentrated mainly in Ho Chi Minh City and Binh Duong province. Compared to 2020, the total new supply is 70 per cent (more than 30,000 units). Among those, more than 17,000 units, equal to 81 per cent of new supply were sold, accounting for only 65 per cent compared to the previous year.

Particularly in Ho Chi Minh City, supply and consumption decreased sharply compared to 2020 and recorded the lowest level since 2015. The type of luxury apartments in the city, however, has established a new price level up to less than VND400 million ($17,400) per sq.m.

The new supply of townhouses and villas in Ho Chi Minh City and neighbouring provinces increased slightly. In 2021, the market received just over 9,800 units for sale from 55 projects, an increase of 34 per cent compared to 2020. The consumption rate reached 57 per cent, equivalent to over 5,600 units, up 7 per cent compared to 2020.

New supply is concentrated in Dong Nai and Binh Duong province, while Tay Ninh and Ba Ria-Vung Tau continue to be short of new supply. Particularly in Ho Chi Minh City, the market’s supply and new consumption volume dropped sharply to the lowest level in the past five years.

Hospitality real estate has shown positive signs of recovery in resort villas and resort townhouses/shophouses. Specifically, the supply of resort villas in 2021 was at more than 4,100 units and the consumption rate was at 71 per cent of the new supply.

The condotel segment witnessed a significant downturn in supply and demand, however, with fewer than 3,800 units supplied to the market. The ratio of consumption to supply is just over 58 per cent in 2021.

According to a forecast from DKRA Vietnam, the new supply and demand of the land plot segment in 2022 may increase compared to 2021, mainly in neighbouring provinces such as Long An, Dong Nai, Binh Duong, and Ba Ria-Vung Tau, while Ho Chi Minh City continues to maintain scarcity.

The new supply may reach about 30,000 units this year, especially in Ho Chi Minh City and Binh Duong in the apartment segment. Long An and Tay Ninh provinces, meanwhile, may continue to be limited in new supply, DKRA said.

Demand is expected to increase compared to 2021, but still relatively low compared to 2019. In Ho Chi Minh City, the new supply is concentrated in Thu Duc city. Grade A and B apartments lead the market, while the supply of Grade C apartments continues to be scarce.

The new supply of condotels and resort villas may increase compared to 2021.