REAL ESTATE BOOMS IN EASTERN HCM CITY

Deputy Prime Minister Truong Hoa Binh’s consent to establish an eastern city of Ho Chi Minh City has stirred up the real estate market there, especially the apartment market. This has brought many great opportunities for developers, secondary investors and end buyers in the coming years.

Thu Duc City or Eastern City is expected to become an independent administrative unit under Ho Chi Minh City, established from the merger of District 2, District 9 and Thu Duc District. Thu Duc City will play a key role in connecting Ho Chi Minh City to neighboring provinces with waterways, roads and metro lines and developing trade thanks to its strategic location in the “Golden Triangle” constituted by three key economic hubs: Ho Chi Minh City, Binh Duong and Dong Nai.

Therefore, according to CBRE, in 2015-2020, selling prices of luxury apartments in District 2 increased by an average of 7.3% a year, above the average market growth. However, the apartment market still has great potential to increase prices in the future. The secondary market has expanded significantly since 2018 as the metro line has gradually completed. The retail price is 25-75% higher than the starting price. In the 2020-2025 period, new supplies in the Eastern City will be quite abundant, with an average annual growth of 11.5%, or 15,000-16,000 new apartments a year, outperforming supply growth in the South (4.6%) and the West (5.3%) of Ho Chi Minh City.

Critical infrastructure projects are being built to connect the Eastern City and other areas in Ho Chi Minh City. In particular, outstanding works include 19.8-km Metro Line 1 starting from Ben Thanh Station in District 1 to the last destination - Long Binh Depot in District 9, expected to be completed by the end of 2021.

Since Metro Line 1 started construction in 2012, many apartment and trade center projects have been established along this train line, especially on Hanoi Highway in Thao Dien, Binh An and An Phu wards in District 2. Thu Thiem is also one of the key areas in Eastern City, covering 657 ha.

In Thu Thiem, the key urban area of ​​District 2, the upmarket segment is key supply. Meanwhile, outside Thu Thiem, projects will target customers who are professionals and young families who prefer convenience, modern utilities and a dynamic lifestyle.

According to CBRE, apartments along Metro Line 1 will be traded more actively to convenient transportation connections. Prime locations close to Metro stations in East City will also attract branded apartment projects.

Ms. Dang Phuong Hang, Chief Executive Officer of CBRE Vietnam, said, new projects in well-planned residential or commercial centers in East City will be preferred by many buyers and their selling prices will be higher. ​​An Phu, Thu Thiem and Saigon High Tech Park (SHTP) will become key areas. With ample new supply in the future, buyers and tenants have more choices. Therefore, developers in Eastern City also need to pay attention to creating new and innovative products to attract customers.

Ms. Duong Thuy Dung, Senior Director of CBRE Vietnam, added that end-buyers and secondary investors will choose apartment projects along the Metro Line in East City thanks to the convenient traffic connectivity with other areas in East City as well as ​​Ho Chi Minh City. However, buyers should consider additional factors such as noise and traffic congestion around the Metro station, and pay special attention to credibility, legal status and project construction progress of developers.

Source: VCCI