Experts fear HCMC luxury apartment market building into bubble
Experts fear HCMC luxury apartment market building into bubble
The ratio of luxury apartments in HCMC rose from 7 percent last year to 39 percent in the first quarter of this year.
Apartments in HCMC's Thu Duc City. Photo by VnExpress/Huu Khoa.
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The high-end segment accounted for another 20 percent, real estate consultancy CBRE Vietnam said in a note. The mid-priced segment, which used to account for 55-60 percent of supply in the past, accounted for the remaining 41 percent.
CBRE classifies apartments priced at over $4,000 per square meter as luxury, at $2,000-4,000 as high-end and at $1,000-2,000 as mid-priced. Those below $1,000 are categorized as affordable.
The average price of luxury apartments currently tops $6,898, up 4.7 percent from a year ago, but high-end units have remained steady at $2,519.
Prices in the mid-priced segment have risen by 6.4 percent to $1,499.
Speaking to VnExpress, Nguyen Loc Hanh, CEO of Asia Gem Real Estate Investment JSC, said the rapid expansion in luxury apartment supply is unsustainable and the disappearance of affordable units from the market is worrisome because they are the main market driver.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said over 60 percent of high-end apartments are bought by speculators, and sounded a similar warning that it is threatening the sustainable development of the housing market.
