In 2024, the shortage of housing supply in Ho Chi Minh City drives buyers to satellite cities like Binh Duong and Long An, offering affordable options priced at 30-40 million VND/m².
A New Solution to Urban Housing Shortages
The housing market in Ho Chi Minh City (HCMC) faces a critical supply shortage in 2024, affecting various property segments. As a result, satellite cities such as Binh Duong, Long An, and Dong Nai have emerged as viable alternatives. These areas offer affordable housing options priced between 30-40 million VND/m², attracting a growing number of buyers seeking homes outside the city center.
The Housing Supply Crunch in Ho Chi Minh City
According to data from Savills Vietnam, the supply of new housing projects in HCMC has significantly declined in 2024, marking a dramatic reduction in the primary market. There are three primary reasons behind this:
- Complicated Legal Procedures
Lengthy and complex legal approval processes hinder the initiation of new projects. Delays in project execution limit the release of new housing products to the market, causing the supply to plummet to a five-year low. - Rising Land and Construction Costs
Developers face challenges in accessing clean land funds. Even when land is available, escalating acquisition and construction costs make financial planning increasingly difficult. - Cautious Market Sentiment
Developers are taking a cautious approach in 2024, opting to test market demand before launching new projects. This strategy further limits the release of new supplies into the market.
Future Outlook for Housing Supply in HCMC
Savills Vietnam predicts a gradual recovery in housing supply between 2025 and 2027. However, the scale will remain modest compared to the boom years of 2018-2019.
- Luxury and Premium Segments (Grade A and B): These are expected to dominate over 50% of the future supply.
- Affordable Housing (Grade C): This segment will continue to face shortages within the city center.
Given these dynamics, housing prices in central and well-connected urban areas are unlikely to decrease significantly. This scenario underscores the rising prominence of satellite cities as potential solutions to meet housing demand.
Why Satellite Real Estate Is Becoming the Go-To Choice
1. Competitive Pricing
Satellite cities like Binh Duong and Long An offer significantly lower property prices compared to HCMC. For instance:
- In Dĩ An and Thuận An (Binh Duong), prices range from 30-40 million VND/m².
- In Long An’s Bến Lức and Đồng Nai’s Biên Hòa, prices are even more competitive, making them attractive to both buyers and investors.
2. Improved Infrastructure
Major infrastructure projects, such as the Bến Lức–Long Thành Expressway and Long Thành International Airport, are enhancing connectivity. These developments make satellite cities more accessible and desirable for potential homeowners.
3. Diverse Property Options
Satellite cities offer a wide range of property types, including:
- Affordable Apartments: Ideal for young families and first-time buyers.
- Low-Rise Housing Projects: Targeted at long-term investors seeking economic growth potential.
Investor Interest in Satellite Real Estate
In Q4/2024, several new and existing projects in Binh Duong, Long An, and Dong Nai have been launched or revitalized. Key players include:
- Domestic Developers: Prominent names like Kim Oanh Group, Becamex, and Bcons are spearheading various housing projects.
- Foreign Joint Ventures: Japanese firms such as Sumitomo Forestry, Kumagai Gumi, and NTT Urban Development are making significant investments in these regions.
These developers recognize the potential of satellite cities to meet housing demand while capitalizing on economic and infrastructure growth.
Economic and Lifestyle Appeal of Satellite Cities
For Homebuyers
Satellite cities cater to individuals and families seeking affordable housing without compromising quality. The availability of modern amenities, coupled with lower living costs, makes these areas highly appealing.
For Investors
These cities are hotspots for long-term investment due to:
- Economic growth is driven by industrial zones.
- Increasing population inflow from HCMC.
- Continuous improvement in transportation and public services.
Key Challenges to Overcome
Despite their growth potential, satellite cities face challenges that need to be addressed for sustained development:
- Infrastructure Completion: Timely execution of key infrastructure projects is crucial to maintaining buyer interest.
- Urban Planning: Ensuring well-planned development to avoid overcrowding and preserve quality of life.
- Legal Clarity: Streamlining processes for property registration and project approvals to build buyer confidence.
Expert Opinions on the Housing Shift
- Ms. Giang Huỳnh, Research Director at Savills Vietnam, highlights that satellite cities offer a range of options for buyers amidst the housing supply constraints in HCMC. However, she notes that the affordable housing segment will remain scarce, particularly in central areas.
- Mr. Lê Hoàng Châu, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), emphasizes that expanding affordable housing to peripheral areas is essential. He views this shift as a necessary step in addressing housing shortages and stabilizing prices.
Conclusion: Satellite Real Estate as the Future of Affordable Housing
In 2024, satellite cities around HCMC are stepping up to address the housing shortage, offering affordable and diverse property options. With competitive pricing, improved infrastructure, and growing investor interest, areas like Binh Duong, Long An, and Dong Nai are set to become vibrant real estate markets.
While challenges remain, the collaborative efforts of developers, local authorities, and investors will shape the sustainable growth of these satellite cities. For buyers and investors, now is the time to explore opportunities in these emerging urban hubs.