Binh Chanh will likely be the new industrial center of HCMC despite the area has run out of land. The booming industry sector has created countless opportunities for the real estate market but also puts great pressure on housing demand in the near future.
Has 4/10 of the largest industrial parks in HCMC
In the 2010 – 2015 period, HCMC’s industry sector led the country in economic indicators and had the largest land funds and industrial parks in the country. However, since 2016, there has not been a new industrial park. This has caused impacts on the city’s economy as the industry sector still accounts for a large proportion of the GDP. According to Hua Quoc Hung, Head of the Management Board of Ho Chi Minh City Industrial and Export Processing Zones, the city’s industrial land fund has been reduced to only 300 hectares of land in industrial parks can be used.
Amidst the situation, Binh Chanh was proposed as the destination to build new key industrial zones in Ho Chi Minh City thanks to its advantage of land availability and convenient traffic. Indeed, HCMC’s People’s Committee has submitted a request to the Government to add the 700-hectare Pham Van Hai Industrial Park in Binh Chanh district in replacement of the 3 other industrial parks that were removed from the planning, including Phuoc Hiep, Bau Dung, and Xuan Thoi Thuong. Notably, Pham Van Hai Industrial Park will apply modern technology, focus on attracting investment in electricity, electronics, automation, start-up support, high-tech industry, and supporting industries that are not labor-intensive and cause pollution.
Binh Chanh is the proposed location for the development of key industrial zones in Ho Chi Minh City.
So after adding Pham Van Hai Industrial Park, Binh Chanh now has 4 out 10 largest industrial parks in Ho Chi Minh City, including Le Minh Xuan and extended Le Minh Xuan Industrial Park (800 hectares – top 2), Pham Van Hai Industrial Park (approx. 700 hectares – top 3), Vinh Loc and extended Vinh Loc Industrial Park (500 hectares – top 4), An Ha Industrial Park (more than 150 hectares – top 10). According to statistics, Ho Chi Minh City reserves 5,800 hectares of land for the industry sector. This means Binh Chanh occupies nearly 30% of the land fund, becoming the industrial center of HCMC.
Housing demand is growing strong
The industrial boom is putting great pressure on urbanization rate in Binh Chanh, especially when the upcoming 700-hectare industrial zone will lead to huge housing demand for hundreds of thousands of people at the same time. The demand came from two main sources, experts and senior engineers who need quality housing and workers who need affordable accommodation. Industrial growth also ignites an explosion of utility services, premises, factories, etc. for the new residents.
Binh Chanh was previously on the list of areas with a shortage of housing supply. This area needs more than 490,000 m2 of housing area, equivalent to nearly 10,000 new apartments each year to keep up with the demand. However, this number will only meet about 30% of housing demand in Binh Chanh in the period 2020-2021. The shortage of supply amidst rising demand has caused real estate prices to surge.
From VND 27 million/m2 in 2017-2018, the apartment price has increased to VND 45 million/m2, villas/townhouses from VND 40 million/m2 to 90-150 million/m2. From 2021, the land price has also increased by 25 to 30% depending on the location. Prices of completed projects such as Calla Garden, The Easter City, and Lovera Vista have gone up VND 33-40 million/m2 from VND 25-30 million/m2, some high-end projects including The Conic, Saigon Saigon Mia, Senturia South Saigon are traded at VND 50-60 million/m2 and at VND 90-120 million/m2 for townhouses/villas.
Despite continuously reaching peaks, Binh Chanh real estate prices are still in the low end of Ho Chi Minh City and have a lot of room for increment. Compared with the average apartment price of VND 60-70 million/m2 in the East, Binh Chanh’s VND 40-45 million/m2 is still low. It is worth mentioning that the housing supply in Binh Chanh is forecasted to be limited as there are not many new products launched. There are not many properties with high demand and good prices. Especially for high-end products for experts and high-paid workers, there are only a few outstanding projects.
Housing demand in Binh Chanh is forecasted to explode strongly following the wave of industrial development in this area.
For example, Westgate with more than 2,000 apartments has the almost-lowest price in the market, i.e. around VND 40 million VND/m2. Westgate has 4 towers, and more than 50 facilities, with a large green coverage and a 4-hectare park. This is one of the few projects that allow buyers to pay upfront only VND 699 million and waive payment until Q4/2023 when they receive the apartment. The remaining balance could also be put on an interest-free loan in two years. As a result, Westgate is very popular with homebuyers.
Or the 26-hectare Mizuki Park township, Flora apartments are offered at VND 40 million/m2, while Valora townhouses and villas are sold at VND 95-120 million per unit. In particular, Mizuki Park launched The Mizuki riverside luxury compound, limited to only 39 villas. These limited luxury products are priced from VND 30 billion per unit. In early 2022, after successfully opening and selling all 166 Flora Mizuki MP9-MP10 apartments, Nam Long plans to launch 400 apartments of Flora Panorama project, which is located right next to The Mizuki, at an expected price of about VND 50 million/m2.
Besides the new 700-hectare Industrial Park affecting the market in the short-term, in the long-term, Binh Chanh Real Estate will also benefit as the district is promoted to city in 2025. Thus, investing in projects with complete legality, center location, and large scale will be a safe option. On the other hand, due to the upcoming promotion to City and increasing inbound of experts and senior engineers, high-quality apartments will become the trending properties in this area.