Wave of Urban Exodus: New Trend in Vietnam's Real Estate Market

A significant trend of relocating from urban centers to the suburbs is emerging in Vietnam, driven by soaring property prices in central areas and rising mortgage interest rates. Huong Minh, a 52-year-old reader from Ho Chi Minh City, shared her decision to sell her 50-year-old house in the central District 3 for VND 5 billion (approximately $200,000 USD) and purchase a 70 sqm apartment in Linh Dong ward, Thu Duc City for VND 3 billion (approximately $120,000 USD). She also bought a nearly 700 sqm plot of land with 100 sqm of residential land, located about 7 km from Ho Tram, for VND 2 billion (approximately $80,000 USD) to prepare for her retirement. The apartment will be left for her two children who work in the city center. Minh advises young people to consider suburban living amidst high property prices, rather than being fixated on central locations. According to a report by Dat Xanh Services (DXS-FERI), approximately 37,300 new housing units were launched nationwide in the first six months of the year, a 16% increase year-on-year. However, despite a total primary supply exceeding 102,400 units (a 40% increase), consumption fell by 12% to 26,100 units, with an average absorption rate of only 20-30%. Many readers support the idea of moving to the suburbs for a better quality of life. One reader commented that the limited land in inner-city areas drives up prices, making satellite areas a more accessible option. They noted that well-developed suburban areas with good infrastructure, roads, and metro lines can mitigate commuting inconveniences, making the total cost of housing and travel more reasonable than struggling to buy in the city center. They also believe that significant price drops are unlikely due to rising costs of land, materials, and construction. Conversely, some readers express skepticism about suburban living. One individual argued that while suburban life might be ideal for those working nearby, commuting to the city center, even with a metro, still incurs significant time costs and exposure to traffic congestion. The challenges of transporting children to school and coordinating with a spouse's work location also add to the inconvenience, explaining why many people still strive to live in or near the city center despite the high costs. Another perspective favors renting in the city center over buying in the suburbs, especially for those with limited capital. A reader calculated that purchasing an apartment near the city center can cost over VND 6 billion (approximately $240,000 USD). For someone with VND 3 billion (approximately $120,000 USD) needing to borrow an additional VND 3 billion, monthly payments, even with initial preferential rates, could exceed VND 50 million (approximately $2,000 USD). In contrast, renting and depositing VND 3 billion in a savings account could yield VND 25 million (approximately $1,000 USD) in monthly interest, presenting a more financially prudent choice. Source: VnExpress