The housing market of Ho Chi Minh City has been driven by the soaring demand for apartments, particularly those at the cheaper end of the market, according to the real estate service provider Savills Vietnam.

The housing market within the city has received a boost from increasing levels of migration and natural population growth. Meanwhile, the decreasing size of households has also resulted in changing demands from nuclear families, including one-child households.

Savills said that there are additional 63,000 HCMC households a year in demand of housing.

Vo Thi Khanh Trang, head of the research and consultancy division of Savills HCMC, said amid the booming demand for homes, the high-end market is still attracting attention from ultra-wealthy people across Vietnam and the region at large.

The housing market has lucrative potential for growth thanks to an abundance in capital, an increasing flow of foreign capital, and appropriate macroeconomic policies, Trang added.

The HCMC authorities have announced new restrictions on adding projects to the city’s housing development strategy by 2020. Those listed in the strategy will be implemented as planned.

Trang cited Savills’ current data and analysis when saying that the future housing supply of HCMC will meet demand if the execution of housing projects goes smoothly.

Although complex and extensive legal procedures emerge as a barrier for many foreign real estate developers, their penetration in the Vietnamese market has been steadily increasing over the past two years and is expected to enlarge further in the near future.

The arrival of capital from foreign investor into the market could lead to higher international standards applied in real estate projects, thus enlarging the supply of high-quality housing and properties.

The eastern part of HCMC is another magnet for both domestic and foreign investors due to the improvement the areas infrastructure has received.

The Singapore-based real estate firm CapitaLand has embarked on its 13th residential project in Vietnam, with the August acquisition of a prime property project in District 2, valued at US$60 million.

Covering over 60,000 square meters, the project is estimated to provide over 100 homes. It is expected to be completed by 2021.

In early July, the global property company Frasers Property announced the purchase of a 75% stake, worth more than US$34 million, in a residential-commercial complex in Thu Duc district.

Additionally, domestic real estate developer Khang Dien also transferred the first phase of a 90-ha residential project in District 9 over to another Vietnamese investor in a deal worth US$12.4 million.

The increasing supply of quality housing, a higher level of disposable income among buyers, and appropriate financial packages have leveraged positive changes in the HCMC property market, Trang said.

VOV