The absorption rate for high-end villas and townhouses in Ho Chi Minh City hit a decade low in the first half of 2023.

The Q2 Ho Chi Minh City Market Brief released by Savills Vietnam highlighted that no new projects in the villa and townhouse segment were developed during the first six months of this year.

The report attributed the absence of new projects in the segment to challenges faced by investors in securing capital, the limited availability of vacant land, and complex legal procedures.

Though the first half of the year lacked new entrants into the market, there were three existing projects with a combined 414 new properties for sale.

Of the available supply, 78 percent were priced at over VND30 billion (US$1.27 million). The majority of these were situated in Thu Duc City. 

Meanwhile, nine percent were priced between VND10 billion ($423,000) and VND30 billion.

The remaining 13 percent were priced below VND10 billion ($423,000).

Despite the ample supply, the sale of residential units from January to June plummeted 74 percent year on year, with only 158 units sold.

The absorption rate – a measure of sale versus supply – during the period reached a 10-year low of 15 percent, marking a 57-percentage-point year-on-year decline.

As per the Savills report, high-end inventory and new launches challenged liquidity as prices rose 48 percent year on year to surpass VND300 million ($2,700) per square meter.

Savills Vietnam expects 500 high-end units to be available for sale in the second half of the year and future supply to peak at 2,500 dwellings in 2025.

Suburban areas such as Binh Chanh, Nha Be, Cu Chi, and Can Gio Districts are anticipated to have a 71-percent share of the supply, with Thu Duc City housing the remainder.

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