REAL ESTATE MARKET IN THE EDGE OF HCM CITY 2018 – 2019
With the advantage of large land fund and increasingly perfect infrastructure, real estate in the suburbs of Ho Chi Minh City is being invested by both foreigner investors and Vietnam investors that create a vibrant market at the end of the year.
There is a huge difference level in the price of real estate in the center and the edge of HCMC. According to JJL’s market survey, at the end of 2018 real estate price in the center ranged from 180 to 220 million VND/m2. Meanwhile, in suburban districts such as Binh Chanh, Cu Chi, Hoc Mon, the price is only around 15 – 30 million VND/m2; In the provinces around HCMC such as Long An, Dong Nai is only at 10 – 15 million/m2. This is the biggest advantage of real estate along the city.
Recently, the People’s Committee of Ho Chi Minh City has adjusted construction planning. Accordingly, the area of the city will occupy an area of 30,404km2 including the entire administrative boundaries of Ho Chi Minh City and seven neighboring provinces of Binh Duong, Dong Nai, Ba Ria Vung Tau, Long An and Tien Giang. , Binh Phuoc and Tay Ninh. At the same time, the city is also restricting licensing for new CBD (Center Business District) projects, which are causing the supply to be exhausted.
At present, there are two provinces, Binh Duong and Dong Nai, which have complete infrastructure to connect with Ho Chi Minh City. From 2019 onwards, the city will deploy more satellite cities to ease the population, reduce immigration pressures as well as pressures for housing and relocation.
Having identified the opportunities, businesses have shifted to invest in real estate projects in the suburbs of the city, especially foreign businesses such as Japan, Korea, Singapore, China, Hong Kong. In the first nine months of 2018, real estate made up 23% of total FDI in Vietnam, according to CBRE. Meanwhile in 2008, only about 10% of total FDI investment in this sector.
This is a strong statement that Vietnam real estate market is on the rise, which attracting foreign investors in the future.
The value is increasing over time
It cannot be denied that there have been real estate fever in the suburbs causing unbalance supply – demand. However, the government has policies to timely adjust information and prices to stabilize the market after that.
However, the price of suburban land has increased dramatically as the development of regional infrastructure creates a perfect connection. For example, right after the decision to build Cat Lai Bridge connecting Nhon Trach – Dong Nai with District 2 – Ho Chi Minh City, real estate price of Nhon Trach and Cat Lai have increased by 25-50% depending on the location placement and segmentation.
In addition, the fact that many industrial parks and factories have sprung up demand for housing also act as a lever for real estate prices. It is known that investors are particularly interested in the housing sector around the industrial zone. According to statistics of the Department of Housing Management and Real Estate Market, over 80% of workers in industrial zones do not have stable housing and they have to rent houses.
Real estate forecasts in the near future
Large real estate research organizations such as CBRE, Savills, HoREA have pointed out that the real estate market in suburban districts and neighboring provinces of Ho Chi Minh City will be bustling more in 2019.
In addition, the government will tighten management, handle inadequate legal and illegal projects, create a healthy competitive market and attract more foreign businesses.