As of the second quarter of 2020, the average price of apartments in Ho Chi Minh in Vietnam was 2,582 US dollars per square meter, and the rental return rate of apartments in Hanoi and Ho Chi Minh in Vietnam was around 4%-7%.
How much does a house price cost per square meter in Vietnam?
According to JLL Vietnam, apartment prices in Ho Chi Minh City surged 27.5% (23.6% inflation-adjusted) in the second quarter of 2020 from the same period last year, averaging $2,582 per square metre. The city's apartment prices rose 5.3 percent (6.3 percent inflation-adjusted) compared to the previous quarter.
JLL said rising house prices in Ho Chi Minh showed that developers were able to stick to their prices given the scarcity of supply and the healthy needs of owner-occupied owners. Price increases in luxury projects in Ho Chi Minh District 2, such as Metrooles Thu Thiem, One Verandah and Giai Viet Central Premium, have collectively raised the average market price in Ho Chi Minh City.
Hanoi house prices have also been rising continuously, albeit at a slower pace. As of the second quarter of 2020, the average price of apartments in Hanoi increased by 4.9% year-on-year (1.7% inflation-adjusted) to $1,493 per square meter. On a quarterly basis, prices rose by 1.3% in the most recent quarter (2.2% adjusted for inflation).
Rental return rate of vietnamese property
According to Savills, the average rental price of apartments in Hanoi in the second quarter of 2020 was US$26 per square metre, up 5% year-on-year. On a quarterly basis, rents for apartments in Hanoi fell slightly by 1% compared to the previous quarter. The average occupancy rate of Hanoi apartments in the second quarter of 2020 was 70%, down 13 percentage points year-on-year. Hanoi serviced apartment supply in the first half of 2020 decreased 2% year-on-year to 4,620 units. About 770 units of seven projects are expected to enter the market this year.
In Ho Chi Minh City, rents for serviced apartments averaged US$23 per square metre per month in the second quarter of 2020, down 6% year-on-year and 4% quarter-on-quarter, according to Savills. The city's average occupancy rate fell to 61 percent, down 19 percentage points from the previous year. In the second quarter of 2020, the total stock of rental apartments in Ho Chi Minh City was 6,400 units, an increase of 10% year-on-year.
The gross rental yields in Hanoi and Ho Chi Minh City – the returns from the purchase price, pre-tax, vacancy costs and other costs of leased properties – are very attractive. According to research conducted by the Global Real Estate Guide, yields in Hanoi remained high around 4% to 7% last year. In Ho Chi Minh City, rental yields range from 2.6% to 6.3%, depending on the area and amenities.
According to the Vietnam Statistical Department, the Vietnamese economy grew by only 0.36% year-on-year in the second quarter of 2020 due to economic activity being limited by the outbreak of the new crown epidemic, a significant slowdown from the 6.73% growth of the previous year. This is the slowest year-over-year increase since the start of 2000. Recently, the International Monetary Fund forecasts that Vietnam's economic growth will slow to 2.7% this year, down from the strong growth of 7% in 2019.
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