HCMCity (VNS/VNA) - High- and mid-priced apartment projects continued tolead the HCM City market in terms of new supply in the first quarter, withaffordable units remaining scarce, according to real estate consulting firms.

With 4,900 units, primary stock was down 56 percent quarter-on-quarter and 31 percentyear-on-year, according to Savills Vietnam’s quarterly report onthe city property market.

Grade B led primary supply with a 57 percent share. New urban areas indistricts 2, 7 and 9 had a 78 percent share of grade B primary supply.

Quarterly sales of less than 2,100 were the lowest in five years andrepresented a quarter-on-quarter decrease of 76 percent and year-on-yeardecrease of 56 percent, mostly due to lower primary supply.

A higher rate of large-sized units with higher unit prices has slowed performanceat existing developments, Vo Thi Khanh Trang, associate director of research atSavills, said.

Prices moved up across all grades, especially in new phases of existing developments,where unit prices increased by 6 percent over their previous launch, she said.

There is very limited supply of affordable units with primary prices of under 1,000USD per square metre and new supply would steadily fall in the coming years, shesaid.

Limited land availability in central areas is pushing up prices of apartments,she added.

According to DKRA Vietnam, the prices of affordable apartments doubled between2013 and 2020 to 30-32 million VND (1,300-1,380 USD) per square metre.

In the first quarter of this year, they went up by another 5-10 percent.

Even in neighbouring provinces such as Binh Duong and Dong Nai, apartmentprices have jumped to 33-45 million VND (1,430-1,950 USD) per square metre.

Grade A led primary supply last year with a 69 percent share while supply ofgrade C were almost zero, according to a report by DKRA.

In the first quarter of this year grade A continued to lead the HCM Cityapartment market in terms of new supply and there was very limited supply ofaffordable units, it said.

A study by the HCM City Real Estate Association showed that high- andmid-priced units accounted for 70 percent and 25 percent of apartment supplylast year.

The affordable segment accounted for only 1 percent of the primary market at amere 163 units.

Le Hoang Chau, chairman of the association, said an apartment project withinitial listing of 30-33 million VND (1,300-1,430 USD) per square metre is nowsold at 50-55 million VND (2,160-2,380 USD).

It is simply raised to a higher grade and sold at higher prices, making itimpossible for end users to afford it, he said.

A survey by the HCM City Institute for Development Studies estimated thehousing demand in the city in 2021-25 at 45 million square metres.

The limited supply of affordable apartments and rapid increase in prices meanapartments are bought for speculative purposes.

Around 70 percent of high- and mid-priced apartments are left unoccupied as aresult, the survey found./.