In the next three years, the cost of buying an apartment in Saigon is predicted to increase by 5 – 10% annually, according to a new report.
The study, compiled by Jones Lang LaSalle’s Vietnam office (JLL), a commercial real estate and property services provider, surveys the price of residential projects in the country’s major metropolises, including Hanoi and Saigon, reports Vietnam News.
JLL expects overall apartment prices in Vietnam to increase by 5 – 7% annually. Housing units in Saigon and Hanoi will experience price hikes of 5 – 10% and 4 – 12% respectively, according to the news source.
During a conference discussing the new changes to the real estate laws last month, Nguyen Van Duc, deputy director of Dat Land real estate, went into detail about the factors behind the price increases.
“Real estate prices are increasing gradually because the cost of labor, interest rates for loans and bureaucratic fees are all rising,” Duc said at the forum, as reported by CafeF. “Interest rates and complex red tape are two issues that are killing businesses.”
However, in the report, JLL also revealed that despite their rising costs, apartments in Saigon are still affordable compared to their counterparts in other Southeast Asian cities. For example, households in the top quintile, with a monthly average income of US$1,337, will require 3.9 to 6.6 years of income to purchase a typical 75-square-meter apartment unit in the affordable to mid-end range. In other regional cities, this figure is 5.7, on average.