According to Savills Viet Nam’s report on the HCMC real estate market in Q1 2025, there has been a significant reduction in new supply due to the Tet Holiday period. The market received only 800 new apartment launches, displaying a sharp decline of 70% compared to the previous quarter. This still represents a 29% increase year-on-year compared to Q1 2024. 

Notably, over half of the new supply is concentrated in upcoming phases of large-scale projects in Thu Duc City and Binh Tan District. The only new project introduced this quarter was The 9 Stellars – Alta Heights (District 9). All new supply falls into the B and C segments, highlighting the continued scarcity of affordable housing. Specifically, the C-grade supply, priced under VND 50 million/ sqm, accounted for only 13% of the new supply, coming from phase 2 of the Green Town project (Binh Tan). 

The scarcity of new supply, combined with the temporary suspension of certain projects that have not yet restarted sales, has led to a 24% decrease in the overall primary market supply compared to the previous quarter, totalling about 5,000 units. When this is compared to the same period last year, primary supply has slightly increased by 2%. 

Transaction Slowdown Due to Seasonality and Lack of Affordable Supply

In addition to the reduction in supply, HCMC’s real estate market also witnessed a significant slowdown in transaction activity in the first quarter of 2025. The total transaction volume resulted in 1,400 units a drop of 46% compared to the previous quarter.  

Compared to the same period over the last two years, this is a more positive sign, driven by extended payment policies and developers offering buyer support. The demand for housing remains high, yet it is unmet, as reflected in the low absorption rate of existing inventory, recorded at 23%. 

In contrast, the new supply had a significantly better absorption rate of 61%. This indicates that buyers today are more selective, prioritizing new projects with favourable locations, transparent legal frameworks, and potential benefits from future infrastructure development. 

Experts forecast that the HCMC real estate market will experience fluctuations in the coming months as suspended projects gradually re-enter the market and new supply is expected to increase. However, the challenge of affordable housing supply remains a major issue for the market in the current context. 

Giang Huynh, Director of Research and S22M (Savills Viet Nam), stated that the supply of C-grade apartments, which is most sought after by buyers, remains low in HCMC. 

The reasons for the bottleneck in affordable apartment supply are twofold: the increasingly limited land supply in HCMC and the rising costs of land and development. As a result, developers with land reserves tend to prioritise mid- to high-end segments to maximise profits, rather than focusing on affordable housing with lower profit margins. 

Additionally, over the past few years, legal procedures have been delayed, preventing housing supply from recovering. However, Savills assesses that the outlook for new regulations and policies is expected to accelerate project launches, ultimately improving housing supply in the medium and long term. 

The urban planning of Thu Duc City creates long-term supply expectations

Progress in urban planning and legal frameworks is a bright spot on the horizon. The general planning for Thu Duc City was approved in January 2025, and this move is expected to significantly improve apartment supply in the area by 2040. The plan encourages the development of high-rise housing projects integrated with public transportation (TOD), with high land-use coefficients. New projects are expected to focus mainly on areas such as Thu Thiem, Truong Tho, Long Binh, and Long Truong. 

According to Troy Griffiths, Deputy Managing Director of Savills Viet Nam, although new apartment supply in HCMC remains limited, the market is receiving positive signals from urban planning adjustments and legal framework improvements, promising future market improvements. 

Furthermore, government authorities are actively resolving legal obstacles for housing projects; a positive signal regarding the approval of legal procedures, building permits, sales agreements, and issuance of pink books for buyers. 

Looking ahead to the remaining nine months of 2025, apartment supply is expected to remain limited, estimated at around 7,000 units. Notably, the majority (90%) of this supply will come from the next phases of seven existing projects. Only four new projects are expected to launch. 

However, the supply outlook is expected to improve significantly by 2027, with an estimated 40,000 apartments scheduled to launch. Thu Duc City is forecasted to lead supply, accounting for 55%, followed by District 7 and Binh Tan, each at 9%. In terms of product mix, the B and C segments are expected to dominate, accounting for 41% and 45%. 

In general, HCMC’s apartment market is undergoing an adjustment phase. Although new supply and transactions in Q1 2025 saw a decline, positive signals from approved urban planning and legal reforms are expected to create momentum for the market’s recovery in the medium to long term.