It has been 1.5 years since Covid-19 broke out in Vietnam and the world at large. While Ho Chi Minh City reacted fast to contact trace and isolate every positive case since the start in order to pursue a zero-case policy, the current outbreak (Vietnam’s fourth Covid-19 outbreak) proved more complicated to control. Since May 2021, social distancing measures have been rolled out across HCMC that has since been strengthened into technically a lockdown in July 2021, with extremely limited economic activities. However, at this point of writing, cases are still on the upward trend proving measures are still lacking and putting the zero-case policy increasingly out of reach; it seems that HCMC and Vietnam as a whole will have to plan to co-exist with the virus in the community for the foreseeable future.

This article looks at how Ho Chi Minh City’s apartment market is impacted and the implications moving forwards. How both supply and demand have shifted? What are the price trends of the new launch and resale apartment markets? When will the rental market recover?

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▸ 1. How both supply and demand of apartments in Ho Chi Minh City have shifted?

 Key Takeaways

  • New launch apartment supply in 1H2021 has declined year-on-year, with new projects put on hold while supply is made up by subsequent sale phases of already launched projects.
  • Demand for new launch apartments have fallen with lesser units sold by developers and decreased absorption rate year-on-year.
  • Secondary (resale and sub-sale) apartment supply has increased slightly while demand has dropped in 1H2021.

The fourth outbreak since May 2021 has resulted in developers delaying new project launches; corroborating various research reports, Ho Chi Minh City registered approximately 6,000 apartment units launched in 1H2021 decreasing year-on-year. Newly released apartment units were mainly attributed to the subsequent phases of large-scale projects that have been initially launched before 2021, including Vinhomes Grand Park (The Origami) and Masteri Centre Point in District 9, as well as Pi City in District 12. With the most significant new launch being Grand Marina in District 1.

Market demand (performance) in 1H2021 was indicated by approximately 7,000 sold units, marking a year-on-year decrease; Savills’s research recorded that absorption rate (total sales divided by inventory) declined from above 80% in 2020 to 60% in 1H2021, marking the lowest absorption rate within the last 5 years. The premium segment made up of 50% of all sold units. Large portion of the sales came from large-scale integrated projects located in suburban areas.

In order to maintain buying demand in the uncertainties of the current Covid-19 outbreak, real estate developers are beginning to be more sensitive to buyers; offering a more relaxed payment schedule and tying in with banks on preferential mortgage financing schemes that offer loans of up to 100% of the apartment value and extended period of interest free borrowing.

As for the secondary apartment market (resale and sub-sale transactions), due to a lack of any form of information provision tracking transactions, a market survey conducted showed that secondary supply has increased slightly with few projects’ handover in 1H2021 from 4Q2020 till date. Demand as indicated by successful transactions on the other hand has dropped as social distancing measures, city wide lockdowns, blackout period for business activities, and uncertainty in controlling the current Covid-19 outbreak have affected buyers’ sentiments. 

 ▸ 2. What are the price trends of the primary (new launch) apartment market?

 Key Takeaways

  • Prices of new launch apartments in 1H2021 has increased across all segments, but at a declining rate year-on-year.
  • Looking forwards, prices in the primary (new launch) market are still expected to increase but at a slower pace.

According to CBRE, selling prices in the primary market for apartments in HCMC in 2Q2021 averaged 2,260 USD per square meter (excluding VAT); the luxury apartment segment recorded 9.2%, premium apartment segment at 0.4%, mid-end apartment segment at 8.3%, and affordable apartment segment recorded 1.6% year-on-year respectively. Research by JLL noted that the average primary price across all the market segments increased at about 4% to 5% year-on-year; with the average selling price of high-end apartments (inclusive of both premium and luxury segments) in HCMC at 4,905 per square meter, up 5.7% from 1Q2021 and 8.3% year-on-year.

Despite the fourth Covid-19 outbreak halting economic activities in Ho Chi Minh City, primary prices of apartments are still escalating, albeit at a declining growth rate year-on-year. These price increases were due to a lack of supply afflicting HCMC’s apartment market especially in the mid-end segment, the first ever launch of an ultra-luxury project at over 12,000 USD per square meter skewing average prices towards the high side, as well as a sustained demand as liquidity flows into real estate as a hedge (seen as a more stable investment channel) as financial markets are highly volatile and banks lower their deposit interest rates. To a lesser extent, the cost hikes of construction material could also contribute to increased prices.

Looking forwards, CBRE forecasts that primary prices will continue to increase at a slower more modest pace as the economy feels the long-term impact of the Covid-19 pandemic. Through to 2022, primary prices will increase by 1% to 4% year-on-year in all segments except the luxury segment, which will increase by 6% due to the emergence of ultra-luxury segment of apartments.

▸ 3. What are the price trends in the secondary (resale and sub-sale) apartment market?

 Key Takeaways

  • Prices of resale and sub-sale apartments in the secondary market has fallen in 1H2021.
  • As buying demand continues to fall, prices are expected to decline in tandem.

Since there are no mainstream information sources specifically tracking successful secondary transactions in Ho Chi Min City and Vietnam as a whole, a good indication is based on information provided by property listing websites and real estate brokers that are focused on the secondary apartment market. Across the board, prices have resale and sub-sale apartments have fallen; although there is no widespread panic selling in 2Q2021, there have been a slight decline in prices as a small portion of homeowners experience income cut-backs from personal salary, business activities, and significant loss of rental income. Those that are under pressure to repay their monthly mortgage loan instalments to the banks offer the highest price discounts.

With the number of successful transactions falling in the secondary apartment market, the general sentiment is that it will remain listless especially for the premium and luxury segments. As buying demand continue on its downwards trend, prices in HCMC’s secondary apartment market are expected to follow in tandem, putting pressure on sellers. 

▸ 4. What is the outlook of Ho Chi Minh City’s apartment rental market?

 Key Takeaways

The property rental market and in particular apartment leasing in Ho Chi Minh City, since the onset of Covid-19 at the start of 2020 has been significantly affected as indicated by increased vacancies and dropping prices. Demand has fallen greatly as foreigners continue to be restricted from entering Vietnam and volatile nature of social distancing measures. Particularly in the recent fourth Covid-19 outbreak, HCMC has entered a blackout period for businesses, as city wide social distancing measures since May 2021 continue to remain ineffective leading to a lockdown since the beginning of June 2020 with no signs of letting up. Ho Chi Minh City’s apartment rental market has encountered a great deal of difficulty as a result.

The slump in price-to-earnings ratio of apartment for rent in Ho Chi Minh City has persisted over the last three years, with high-end (both premium and luxury segments) apartments feeling the brunt. According to a study by the largest real estate listings portal “”, rental yields (as calculated taking the total rent a year divided by the apartment price) for HCMC apartments declined from between 6% to 8% in 2017-2018 to approximately 5.2% in 2019, and further continuing its downwards trend to about 4.5% in 2020 before registering a record low of 4% in 1H2021.

“” went on the further breakdown rental yields according to apartment segments and noted that high-end (inclusive of premium and luxury segments) apartments are now registering the lowest returns of about 3.7%, mid-end apartments presented a slightly higher return of under 4.1%, while property investors are seeing earnings of around 4.5% to 4.8% with affordable apartments. Significantly, neighbourhoods with a high concentration of premium apartments for rent in Ho Chi Minh City such as District 2 (Thu Duc City) and Binh Thanh District recorded an average rental yield of between 3.7% and 3.8%, considerably lower than the 4.4% to 4.8% for mid-end and affordable apartments in District 7, Binh Chanh District and Nha Be District.

Market surveys have estimated that rental prices on average for high-end (luxury and premium segments) apartments have easily declined by about 25% due mainly to the huge drop in foreign demand as travel restrictions into Vietnam have curtailed foreigners coming to HCMC and homeowners forced to target local Vietnamese tenants with lower income to spend on housing needs.

The rental apartment market in Ho Chi Minh City specifically the premium and luxury segments will face a long road to recover to pre-pandemic levels as the economic impact of Covid-19 will tighten tenant’s budget on housing and the worsening supply and demand imbalance for apartments. A shortage of affordable apartments and supply glut of high-end (luxury and premium segments) apartments are making it difficult for renters to lease suitable accommodation; people planning to rent an apartment in HCMC have a budget of between 215 to 345 USD, but most mid-end to luxury segments rental apartments currently have a monthly rent upwards of 430 USD.

▸ 5. Is it the right time to buy, sell or wait?

With the view that new launch apartment prices in the primary market will still continue to increase trough to 2022 due to supply not being able to keep up with demand, property buyers in the market for new launch apartments should take the opportunity afforded by the uncertainties of the current outbreak of Covid-19 stifling developers’ optimism and bullishness and keep price appreciation minimal. Eventually, as the Covid-19 outbreak comes under control, developers will start looking at how much higher they can push prices up.

Homebuyers may consider focusing on the resale and sub-sale apartment market in HCMC, as prices are on the downward trend albeit at a slow rate, as home sellers are still cautious and try to avoid panic selling. However, there might be possibility for decent deals as people incomes from business and salary are cut-backed due to the economic standstill from social distancing measures and lockdowns.

For home sellers, it is time to sell should the opportunity arise; most property owners have enjoyed a decent price appreciation as apartment values have continuously risen since 2013. Demand for homes is likely to remain slow as buyers will hold back in expectance of significant price drops, this will put pressure on sellers as there is insufficient demand to meet supply and jack up prices. Moreover, secondary supply of apartments will only tend to increase as more real estate project are handed over and more home owners put their apartments on the market as the economic effect of Covid-19 is felt eventually.

Finally, investors of rental apartments in the mid-end, premium and luxury segments that have un-tenanted units should act decisively to lower rental prices in order to attract local tenants with smaller housing budgets to tide over the Covid-19 outbreak. Prolonged cautiousness to lower rental prices will lead to increased vacancy with no income, only to be forced to subsequently lower prices at a later date as substantial price discounts become more common place market wide due to demand and supply imbalance.


This article is intended to be an informational resource to provide knowledge in guiding real estate investors, home owners, property buyers and sellers to have an overview on how Ho Chi Minh City’s apartment market is currently and what awaits in the future. For more in-depth analysis and opinion on Ho Chi Minh City’s housing market, please speak to any of our real estate agents.