Real estate in District 2 – A potential market along with unpredictable traps

Strengths and weaknesses of the market in District 2

Almost real estate products in District 2 are marvellous

Weaknesses of the real estate market in District 2

Cons 1: Talking about this market, surely everyone agrees that the minus point is that the number of projects provided to the market is overload. There will be at least one project introduced to the market every 1-2 months. Since 2017, the market has mainly concentrated on high-class products.

• The positive point is that create more opportunities for customers who buy apartments. Even if customers want to buy flats to invest, they still have high profitability thanks to the vibrant market by projects in the region.

Cons 2: Some customers are worried about the price of real estates in District 2 which increases continuously. The latter project has a higher selling price than the previous one, the completed project then has a lower selling price than the new one.

• One bonus point is most of the projects’ price mainly grows based on infrastructure in this area. Some areas of District 2 such as Thu Thiem, Rach Chiec, Thanh My Loi are forecasted continue to develop which allow customers to earn more profits.

Cons 3: In the period from 2015 until now, customers are more concern about the legality of the projects. However, the delay in the legal settlement of many areas such as Rach Chiec, Thu Thiem, Binh Khanh causes difficulties for both investors and customers.

• Depending on the potential of the investors, the time for legal settlement will be adjusted, other legal procedures in District 2 have been preliminarily simplified, but the redetermination of land value still took longer time.

Strengths of the real estate market in district 2

Pros 1: District 2 market is the main supply to causes a large number of brokers and customers. This area concentrates on the major brokerage companies distributing products in Saigon. Consequently, a huge number of customers being attracted to this market. Hence, it makes the supply and demand in this market always better than the rest in HCMC.

Pros 2: Planning more methodically in the following projects. Especially, projects located in Thu Thiem and Rach Chiec are now synchronously planned on infrastructure as well as living utilities.

Broadly, Thu Thiem will be the symbol of the future of Vietnam when The East of Saigon has fully planned. Meanwhile, other areas will be developed as satellites for Thu Thiem. With the vision of 2018 - 2025, this area will be completely accomplished to be a great long-term investment opportunity.

Pros 3: Big brands’ concentration. District 2 is a hot spot for FDI corporations to invest in real estate such as Capitaland, Keppel Land, Kusto Home, Lotte, GS E&C, Hong Kong Land, Frasers Property, Mapletree. These are all big foreign investors conducting business in Vietnam that almost present in District 2.

Notably, besides the quality and prestige, foreign investors are favoured by customers because the payment method is effective and time-consuming. The law does not allow more than 50% before receiving the house so most of their projects is paid only 1-2% per month.

Pros 4: Rental rate in District 2 is much better than in other districts. From the centre to the adjacent locations, the rate is fluctuating from 4-5%, particularly in District 2, the rate of oscillation is better, from 5-7%. If combined with the accumulation of assets, after utilizing houses for rent after 4-5 years, selling will be a very good option to gain profit.

Which area in District 2 worth considering?

Many foreigners passionately pour money into the Vietnam real estate market

1 / If you need an apartment in District 2 to stay (temporarily):

If you urgently need to rent:

+ Thao Dien

•      Strengths: Great community, class. Accompanied by living utilities similar to the level for residents living in Thao Dien.
•      Weaknesses: Often flooded, currently replacing sewers to solve.

+ An Phu - An Khanh

•      Strengths: Crowded area, with full living facilities. Residents and amenities developed along the roads such as Hanoi Highway, Song Hanh, Tran Nao and Luong Dinh Cua.
•      Weaknesses: The planning is a bit old, not very consistent.

For the long-term investment:

+ Thao Dien: Thao Dien is at a different level, could say that is a good option to live longer. This area is well-known with a trustworthy community.

+ Thu Thiem: located in East Coast of Saigon, the location of the most luxurious urban projects. when completely established, the caste and wealthy people will be the majority of the young generation with high influence on society. Currently, you can see Sala projects of ​​Dai Quang Minh, completely outstanding from the surrounding.

+ Rach Chiec: This area is adjacent to District 9 but completely new. It is very convenient to travel with the parallel routes like Mai Chi Tho, Ha Noi & Do Xuan Hop highways. Living facilities are sufficient and high-end similar to Saigon Sports City, Palm City along with the largest commercial in District 2.

2 / If your purpose is for investment:

Actually, when planning to invest, the first factor to consider is traffic and population. These are two main factors that make real estate value increase regarding its long-term estimation, not the virtual fever market.

In District 2, there are 2 areas that truly deserve:

+ Thu Thiem and surrounding areas within a radius of 2 kilometres: Thu Thiem has increased sharply from 2015 up to now but predicted still rising sharply as larger projects announcement. Thus, the area adjacent to Thu Thiem, it totally makes sense if the price is < 75 million VND.

This area has visualized that start being excited from the end of 2019 and will be bustling in 2024 (At this stage, most of the big projects in Thu Thiem have begun to hand over to residents to live).

+ Rach Chiec: As mentioned above, to choose another good investment area in District 2, Rach Chiec is the second option after Thu Thiem that has been implemented from 2017 to the present. In Rach Chiec, Palm City & Saigon Sports City clusters, Lakeview urban area (Novaland) has been formed. Especially, nearly 200 hectares of old Rach Chiec golf course are promisingly invested by many big groundbreaking companies.

From the first period of the beginning of 2017, it is best to invest but the next period, a good time for effective investments in mid-2019 (before the opening of the Song Hanh Expressway). By 2021, this area will have a vibrant population, and 2024-2025 will begin to form in its entirety.

Which investor in District 2 has a project worth buying

The real estate industry in Vietnam is predicted in the booming stage in five more years

1 / With the need to buy Accommodations:

We will evaluate developers in District 2 based on existing projects.

Luxury apartments: Dai Quang Minh, Keppel Land, Son Kim Land, Capitaland, Kusto Home - Diamond Island

Mid-range apartments: Homyland, Kien A

2 / With the need to buy investment:

It is split up many methods, accompanied by the investors in accordance with that need.

Accumulation of assets: Keppel Land & Capitaland buying priority with a very good payment policy.

•       Long-term investments: Large developers with good payment policies and good quality handover are the just second priority after important infrastructure and residential factors. Based on this criterion, you can refer to projects in key investment areas of investors such as Keppel Land, Capitaland, Novaland.
•       Short-term investment (swing trade): The number of projects that can be surfed is very small, and of those few projects, just a few apartments are effectively surfed. Therefore, I recommend customers to be careful if you are planning to surf the apartment in District 2.

However, there will be opportunities with special projects that more brokers participating in. Whilst projects with a small number of apartments or special areas like Thu Thiem, they also have the chances to surf.

Investors can consider Masteri, Empire, Sonkim Land and The Metropole or other big projects like Laimian of HDTC (in the case already announced with a large number of participating brokers). But the customer should note that the winning rate or profit is not high.

The selling price of District 2 apartments by region

Thanh My Loi Region

1 / Thanh My Loi area:

+ Completed: Completed price ground from 48 million / m2 - 60 million / m2.

Typical projects of the region: Vista Verde - Diamond Island

+ New sale: The selling price is from 70 million / m2 - 80 million / m2.

Typical projects: One Verandah, La Premier (Price is about VND 38 million / m2)

2 / Thu Thiem area:

+ Completed: Completed price ground from $ 4500 / m2

Typical projects of the region: Sala of Dai Quang Minh.

+ New sale opening: Price range from $ 4800 / m2 - $ 5500 / m2

Typical projects: Empire City - The Metropole

3 / Thao Dien area:

+ Completed: Price ground from 50 million / m2 - 65 million / m2

Typical projects: Tropic Garden - Masteri - Gateway Thao Dien.

+ New sale opening: The selling price is from 55 million / m2 - 75 million / m2

Typical projects: D’edge - Q2 Thao Dien

4 / An Phu - An Khanh area:

+ Completed: Price ground from 44 million / m2 - 65 million / m2

Typical projects: The Sun Avenue - Estella Heights

+ New sale opening: Price range from 55 million - 75 million / m2

Typical projects: The Palaca Residence - Laimian City - Masteri Parkland

5 / Binh Khanh area:

+ Completed: Price ground from 55 million / m2

Typical projects: New City

+ New sale opening: Price ground is from VND 65 million / m2 - VND 80 million / m2

Typical projects: Paris Hoang Kim - Water Bay & Saigon Broadway (Novaland)

6 / Rach Chiec Area:

+ Completed: Price ground from 35 million / m2 (rough delivery)

Typical projects: Palm Heights subdivision in Palm City of Kepple Land

+ New sales opening: The selling price is from 40 million / m2 - 58 million / m2

Typical projects: Gem Riverside - Palm Garden & future Saigon Sports City

In addition, there are 2 other areas of Binh Trung & Cat Lai wards with some average price projects below 35 million / m2 that customers can refer to.

+ Completed: Homyland 2 - La Astori - Citi Home - Citi Soho.

+ New sale: Homyland 3 - Citi Alto