HCM CITY — Apartment prices in HCM City continued to climb in the first quarter even as transactions fell sharply, as elevated borrowing costs and cautious sentiment weighed on demand, according to property consultancies.

Primary apartment prices in the expanded city averaged more than VNĐ97 million (US$3,700) per square metre, up 3.2 per cent from the previous quarter and 11.8 per cent year-on-year, data from London-based property consultancy Knight Frank showed.

Separate figures from Batdongsan.com indicated average prices rose nearly 10 per cent from a year earlier to around VNĐ69 million per square metre, while buyer interest increased 36 per cent.

Despite the price gains, market activity weakened markedly.

About 1,580 apartments were sold in the January-March period, with an absorption rate of roughly 36 per cent of primary supply, down nearly 66 per cent from the previous quarter, according to Knight Frank. 

Broad-based declines

The slowdown was echoed by DKRA Consulting and JLL Vietnam, which reported broad declines in transactions across segments.

High-end apartment sales alone fell about 16.6 per cent quarter-on-quarter, while new supply dropped more than 26 per cent.

Market liquidity began to cool after the Tết (Lunar New Year) holiday, with sales across key segments such as apartments and landed homes falling to just 20-30 per cent of end-2025 levels, according to DKRA Consulting.

Pre-sales bookings at many projects have halved, while a growing number of deposits have not converted into final contracts as buyers reconsider purchases.

Mortgage rates remain a key constraint. Home loan rates typically range from 9.6 per cent to 10 per cent during promotional periods and can rise to 13-15 per cent thereafter, increasing financing costs and dampening demand.

“Liquidity has declined due to more cautious and selective behaviour from both buyers and developers, rather than a collapse in underlying demand,” said Sơn Hoàng, a senior research executive at Knight Frank Vietnam.

Supply has also tightened significantly. Around 4,000 new units were launched in the quarter, down 87 per cent from the previous three months, with central districts accounting for just over 800 units.

Developers have largely resisted price cuts despite weaker sales, citing rising input and financing costs.

Higher construction material prices, tighter payment conditions with contractors and prolonged legal bottlenecks have added to financial pressures, limiting room for discounts.

Instead, developers are adjusting sales strategies, offering incentives such as interest rate support, extended payment schedules and selective discounts to attract buyers.

Lê Thị Huyền Trang, managing director of JLL Vietnam, said: “Higher interest rates are reshaping buyer profiles, with those less reliant on borrowing becoming more active."

Apartment prices continued to edge higher during the quarter, rising about 2-3 per cent from the previous quarter, with some new launches pushing average prices close to VNĐ110 million per square metre.

Analysts said the market is entering a phase of slower but more stable growth, characterised by firm prices but subdued liquidity.

Price increases of around 3-8 per cent are expected if borrowing costs ease gradually, while about 50,000 new units expected to enter the market by 2027, mostly in the high-end segment, could sustain price levels even as affordability pressures intensify. — VNS