Nguyen Lan Huong, a District 8 resident, recently purchased a 62-square-meter apartment in Long An Province for VND1.5 billion (US$60,000).
After months of searching, she realized that the same amount would not even get her a home in HCMC, not even in social housing projects.
Huong and her husband, who earn a combined VND25 million a month, lacked sufficient cash for a significant down payment, so they opted for a mortgage.
The only drawback is that her new home is located more than 16 kilometers away from where she works.
Similarly, Tran Vinh Phat has become a homeowner after buying a VND1.6 billion apartment in Binh Duong Province.
After six months of consideration, he concluded that he would need to borrow at least VND1.5 billion to buy a 56-square-meter apartment in HCMC, while in Binh Duong, the loan requirement was halved.
The new home is located nearly 16 kilometers away from HCMC downtown, but it saved him a lot of money, he added.
Around 80% of homebuyers in Binh Duong in the first six months were from HCMC, according to property consultancy Savills Vietnam.
Property listing platform Batdongsan found that in the first nine months, 77% of homebuyers in Long An were from HCMC, and the same ratio is 45-49% in Dong Nai and Ba Ria Vung Tau Provinces.
Some developers estimate that around half of buyers in Long An and Dong Nai come from HCMC, and they are interested in apartments priced VND2 billion or lower.
Giang Huynh, head of research at Savills, said that affordable housing demand in HCMC is rapidly increasing, while the supply of low-cost homes is shrinking.
Though some older apartments in HCMC are priced under VND2 billion, buyers often need large bank loans or to make substantial upfront payments.
HCMC residents therefore have no choice but to look for opportunities in satellite localities, where prices are lower and mortgage payments are available, she added.
Nguyen Quoc Anh, deputy CEO of Batdongsan, said that apartment prices in HCMC have surged in recent years.
Meanwhile, searches on the platform for homes in Binh Duong have jumped 32% year-on-year in the first nine months, and the growth is 17-18% in Long An and Dong Nai, he added.
Many developers have anticipated the trend and have constructed affordable projects in neighboring localities.
Investment funds Cosmos Initia and Koterasu Japan have poured $150 million into a venture with local firm TT Capital to launch thousands of affordable apartments each year in Binh Duong.
Nishi Nippon Railroad and Hankyu Hanshin Properties Corporation have partnered with developer Nam Long to build nearly 6,000 affordable units in Long An in upcoming years.
Thailand’s investment fund Asset Limited plans to launch 9,000 units in HCMC’s satellite cities.
HCMC needs 50,000 new apartments annually to meet rising demand of mid-income earners who mostly look for homes under VND3 billion, according to Savills.
This category, however, will likely account for less than 5% of the city’s total supply by 2026, it added.
