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Research Field: Real Estate| MARKET RESEARCH – P.V.N.Ngọc

Unveiling the HCMC Apartment Market: Insights from 2019 to 2022

Chart 1: Vietnam’s Quarterly GDP From 2019 to Overview Market

2022
Vietnam’s Economy: Promising Signs
13.71
Vietnam's economy from 2019 to 2022 witnessed numerous bright spots, highlighted by the
remarkable growth in the GDP figures. In 2019, the economy grew steadily, with growth
7.486.97 7.83
6.826.73 6.73
5.92 rates ranging from 6.82% to 7.48% across different quarters. Despite the challenges posed
5.225.05
4.484.72
3.82 3.32 by the COVID-19 pandemic in 2020, Vietnam managed to maintain a positive growth
GDP

2.62
0.36 trajectory, with a notable recovery in the fourth quarter, reaching a growth rate of 4.48%.
Over the course of three years, Vietnam has maintained an average growth rate of 5.05%,
-6.02
solidifying its position as one of the most promising economies in Southeast Asia and
globally.

The Significant Contribution of Industrial and Construction Sector

Source: gso.gov.vn
Vietnam's GDP composition went through notable transformations during this period,
Chart 2: Growth Rate of The Industrial and
Construction Sector reflecting a shift towards a more diversified and service-oriented economy. In 2019 and 2020,
the agricultural, forestry, and fisheries sector accounted for approximately 14% of GDP, while
the industrial and construction sector contributed around 34.5% and 33.72% respectively.
8.9
7.78 The service sector consistently held the largest share, ranging from 40.95% to 41.63%.
6.5
Within the real estate sector, the industrial and construction segment played a significant role
4.05
in Vietnam's GDP. In 2019, it contributed 8.9% to the overall GDP, gradually declining to 6.5%
in 2020 and further dropping to 4.05% in 2021. However, there was a notable rebound in
2022, with the sector's contribution rising to 7.78% of GDP. This increase indicates the
potential for a revival and growth in the real estate industry, backed by infrastructure
2019 2020 2021 2022
development and increased construction activities.
Source: gso.gov.vn
Table: Vietnam’s GDP Composition
Chart 3: Vietnam’s GDP Composition
The agricultural, forestry, and The industrial and The service Tax and
fisheries construction sector others
Tax and others

The service sector 2019 14 34.5 41.6 9.9

The industrial and construction
2020 14.85 33.72 41.63 9.8
The agricultural, forestry, and fisheries
2021 12.36 37.36 40.95 8.83
0 20 40 60 80 100 120 140 160 180

2019 2020 2021 2022

2022 11.88 38.26 41.33 8.53
Source: gso.gov.vn
Source: gso.gov.vn
Chart 4: Growth Rate of The Industrial and
Construction Sector HCMC – Economic Indicators
13.9 In 2022, Ho Chi Minh City (HCMC) continued to showcase strong economic performance, as
evidenced by the impressive 9.03% growth of GRDP. This economic growth demonstrates the
9.03
7.8
city's resilience and its ability to attract investment despite global economic uncertainties.
The city attracted approximately US$3.94 billion in FDI in 2022, representing a 5.4% increase
2019 2020 2021 2022
compared to the previous year. The sustained growth of the GRDP and the increase in FDI
inflows showcase HCMC's ability to attract investments, create job opportunities, and foster
-6.78
innovation. These developments contribute to the modernization and urbanization of the
city, improving the quality of life for its residents.
Source: gso.gov.vn
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Chart 5: The percentage of apartment market segments HCMC Apartment Market

in Ho Chi Minh City.
The apartment market in Ho Chi Minh City (HCMC) has experienced a remarkable growth
120%
trend in recent years, driven by increasing demand and favorable market conditions. HCMC
100%

80%
offers a diverse range of residential options, catering to various segments of the market,
60% including luxury, mid-range, and affordable apartments. This diversity of offerings has
40% allowed the market to capture a wide range of buyers, from owner-occupiers to investors
20% seeking rental income or capital appreciation.
0%
2019 2020 2021 2022
Apartment Segments in Ho Chi Minh City
Luxury Segment Mid-Range Segment Affordable Segment
The outlook for the apartment market in Ho Chi Minh City is considered optimistic as it has
consistently achieved positive growth rates in both the ratio of new projects and the
Source: Savills
absorption rate. In the years 2021 and 2022, the market recorded average growth rates of
Chart 6: The ratio of new projects and absorption rate 23.3% and 16.8% respectively. Moreover, in the market segmentation, Ho Chi Minh City also
witnessed significant shift in the domination. In 2019 and 2020, the luxury segment dominated
30,000
the market, followed by the mid-range and affordable segments. However, in 2021 and 2022,
25,000
there was a notable shift as the mid-range segment became the largest segment, while the
20,000
luxury segment decreased significantly. From that the overall growth of the apartment market
15,000
during this period can be attributed to a substantial increase in prices, with an average 43%
10,000
surge, along with a persistent shortage of affordable housing options.
5,000

0 Luxury Apartment Mid-Range Apartment Affordable Apartment

2019 2020 2021 2022
(> 50 mil/m2) (25 m2 - 50 m2) (< 25 m2)
New Supply Demand

Source:DKRA
Increasing in Price with A Noticeable Differentiation Across Areas
From 2019 to 2022, the apartment prices in Ho Chi Minh City have exhibited an overall upward
Chart 7: The distribution of new apartment supply in Ho
Chi Minh City trend, with a noticeable differentiation across different regions of the city. The central area,
renowned for its prime location and convenient amenities, experienced the highest price
4% 1%
increases. The southern region also saw substantial price growth, driven by its growing
infrastructure and economic development. Meanwhile, the northern and eastern regions
20% witnessed more moderate price increases. This divergence in price trends reflects the varying
demand and desirability of different parts of the city.
58%
17%
On the other picture about price, according to the DKRA research, the distribution of new
apartment supply in Ho Chi Minh City reveals a dominant concentration in the eastern area,
accounting for 58% of the total. The southern area comes in second, contributing to less than
East West South North Central 30% of the eastern area's supply. Meanwhile, the west area accounts for 17%, the north area
for 4%, and the central area for only 1% of the new apartment supply.
Source:DKRA
This data suggests that the eastern part of Ho Chi Minh City is experiencing significant
Table: Price Range in Areas in Mill/m2 development and growth in the apartment market, with a substantial portion of new projects
being concentrated in this area. This can be attributed to various factors, such as the
East Area 24-45 availability of land for development, infrastructure development, and increasing demand for
housing in that region.
West Area 28-80
Thriving Apartment Market: Positive Impacts in Ho Chi Minh City
South Area 18-93
Ho Chi Minh City's apartment market witnessed a promising outlook from 2019 to
North Area 27-312 2022, driven by three key factors:

Central Area 45-371

INFARSTRUCTIO POPULATION
REGULATION
N GROWTH
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Chart 5: The stage of important regulation and policies  The implementation of regulations and policies aimed at promoting the real estate
from 2019 to 2022 sector.

One of the notable regulations was the issuance of Decree 69/2021/ND-CP on "Renovation
and Reconstruction of Apartment Buildings" in July 2021. This decree aimed to accelerate the
process of renovating and rebuilding old apartment buildings, providing a boost to the overall
development of the market. Furthermore, the government's strategic approach to housing
development was evident through the issuance of Decision 2161/QD-TTg in December 2021.
"Renovation and
Reconstruction of This decision outlined the development strategy for national housing from 2021 to 2030, with
Apartment Buildings" a vision toward 2045. It set clear objectives, tasks, and solutions for housing development,
in 69/2021/ND-CP along with the revision of real estate business laws. Additionally, the implementation of
Decree 15/2022/ND-CP in January 2022, which provided tax incentives and reductions, further
supported the growth of the apartment market. These regulations and policies created a
favorable environment for investment, renovation, and development, contributing to the
Strategic approach to overall progress and success of the apartment market in Ho Chi Minh City during the
housing development -
Decision 2161/QD-TTg mentioned period.

 The execution and development of major transportation projects enhanced

connectivity and accessibility.

Tax incentives and Several noteworthy projects were executed during this period, including the completion of
reductions in Decree the Dai Hoc Quoc Gia intersection on Ha Noi Highway in November 2019, the construction of
15/2022/ND-CP the three-level underground tunnel in the southern region of Saigon, and the expansion of
Truong Chinh and Tan Ky Tan Quy roads. Additionally, the inauguration of the Binh Tan - Tan
Phu bridge branch, which connects Binh Tan District to Tan Phu District, and the opening of
the road linking Nhon Trach district to the TP.HCM - Long Thanh - Dau Giay expressway also
contributed to improved connectivity and accessibility.

Specially, the two significant transportation projects in Ho Chi Minh City, which were the
Source: gso.gov.vn opening of Thủ Thiêm 2 Bridge and the expansion of Nguyen Van Linh Boulevard, had gain
great value in the accessibility and connectivity for the city. The opening of Thủ Thiêm 2 Bridge
Table: Major transportation in area from 2019 to 2022 was of great importance as it linked the central area of the city to the northern region. This
bridge provided a crucial connection that facilitated easier and faster transportation between
East Area  The Dai Hoc Quoc Gia
these two parts of the city. The expansion of Nguyen Van Linh Boulevard played a vital role in
intersection on Ha Noi
enhancing connectivity and transportation in the southern part of Ho Chi Minh City. This
Highway
expansion project aimed to alleviate traffic congestion and improve the flow of vehicles along
 TP.HCM - Long Thanh - Dau
Giay expressway
this major road. As a result, the demand for apartments in this area experienced a notable
 Thủ Thiêm 2 Bridge increase, driven by the improved accessibility to the central business districts and other key
areas.
West Area  Binh Tan - Tan Phu bridge
 The population growth in Ho Chi Minh City had exhibited a sustained upward trend.
branch
 the expansion of Truong The rising population has created a growing demand for housing, particularly in urban areas.
Chinh and Tan Ky Tan Quy As more people migrate to the city in search of employment and better opportunities, the
roads
need for residential spaces has identified. This increased demand has led to a surge in
apartment construction and development projects across different parts of Ho Chi Minh City.
South Area  The expansion of Nguyen Van
Linh Boulevard The apartment market has also witnessed a corresponding expansion to accommodate the
rising population. Developers responded to the demand by launching new apartment projects
North Area
and increasing the supply of residential units. This resulted in a vibrant and competitive
market, offering a wide range of options for prospective buyers and renters.
POPULATION AVERAGE GROW RATE THE AVERAGE FLOOR THE TOTAL ADDITIONAL
AREA/PERSON RESIDENTAL FLOOR AREA NEEDED
(m2)

9 MILLION 2.3% 19,4 4.015.405

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Conclusion
In conclusion, the period from 2019 to 2022 experienced significant developments in the apartment market of Ho
Chi Minh City (HCMC). The market experienced steady growth driven by various factors, including favorable
economic conditions, government policies, and infrastructure improvements.

One notable trend was the increase in absorption rate and the change on the housing segment. A significant
proportion of apartment listings and interest centered around mid-range housing options, reflecting the accessibility
and affordability needs of the majority of residents in HCMC. This emphasis on this segment is likely a result of
government initiatives and regulations aimed at providing housing opportunities for a wider population.

Geographically, the Eastern and Southern regions of HCMC emerged as key areas for apartment development. These
regions benefited from infrastructure and transportation projects, such as the opening of new roads and bridges,
which enhanced connectivity and accessibility. This, in return, contributed to the concentration of development
projects and investment in these areas. Furthermore, the implementation of regulations and policies, such as
69/2021/NĐ-CP and 2161/QĐ-TTg, aimed at promoting real estate and supporting the renovation and construction
of residential buildings, played a crucial role in stimulating the apartment market.

It is important to note that the apartment market in HCMC is dynamic and influenced by various external factors.
While the period from 2019 to 2022 exhibited positive growth, it is essential for market participants to monitor and
adapt to changing conditions, including economic fluctuations, policy adjustments, and shifts in consumer
preferences.
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