Surging property prices draw bidders for derelict Vietnam towers
The removal of a major bureaucratic barrier has also helped pique interest
[HANOI] In the heart of Ho Chi Minh City, a sprawling complex of nearly 3,800 abandoned apartments, originally earmarked for families who’d been moved off their land, is back on the market after four failed auction attempts.
The shortage of affordable housing has become so acute in this Vietnamese city of almost 10 million, where the construction ministry says home prices have surged more than 30 per cent this year, that even dilapidated so-called resettlement dwellings are being reclassified for sale.
Just 5,000 new units came onto the market last year, according to CBRE Vietnam. That’s tightened the squeeze on a growing band of middle class buyers priced out of luxury condos but still in need of somewhere to live.
“As prime land has become limited, developers have faced constraints in securing sites, which explains their current interest in these abandoned homes,” Savills senior research manager Cao Thi Thanh Huong said.
The previous auctions failed to attract developers partly because the real estate firms were struggling financially, and partly due to weak take up rates, particularly for high-end units, said Tran Khanh Quang, chief executive of Viet An Hoa Real Estate Investment.
This time round, the auction has drawn interest from Son Kim Land, a consortium of Sunshine Group and DIA Investment, as well as Bcons Real Estate, according to statements from the companies.
“Apartment prices in major cities have risen sharply and sales for both the mid- and high-end segments have strengthened,” said Quang. “This is a good time for developers to bid for these abandoned apartments and upgrade them.”
Originally built by the state more than a decade ago to resettle families displaced by the Thu Thiem new urban area development, the apartments are part of a larger block of roughly 12,500 homes, located in an up-and-coming district where the country’s new international financial centre is planned.
Most remain vacant, with families saying the relocation compensation they received was not enough to cover purchase costs. “Many families are still living in deteriorating temporary housing because the compensation they received was too low to buy a resettlement apartment,” said Le Duc Trong, 33, whose home was demolished for the redevelopment.
Representatives from the Department of Construction of Ho Chi Minh City were not immediately available to comment.
Fifth time lucky
The removal of a major bureaucratic barrier has also helped pique interest. In March, the complex was converted from resettlement housing to commercial use, making it easier for developers to raise capital while loosening restrictions on potential buyers.
“Developers struggled with legal obstacles and the bond crisis in the last few years, which drained their resources and discouraged them from participating in previous auctions,” said Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association (HoREA).
Sunshine Group cited robust housing demand and progress in easing legal bottlenecks as key to its involvement. “These factors are creating a solid foundation for the property market to regain momentum and attract more long-term developers,” a company spokesperson said.
During Covid, the Thu Thiem complex was used as a quarantine area and field hospital; now it’s surrounded by iron fences and grass that’s grown to head height in some places. Despite its shortcomings, it stands alongside more high-end developments.
Right across the road, there are units selling for around 90 million dong (S$4,466) per square metre. Elsewhere in the financial district, prices can climb as high as 300 million dong.
Home prices in both Hanoi and Ho Chi Minh City rose sharply in the first nine months of 2025 from the year prior, climbing 33 per cent and 36 per cent respectively, according to construction ministry data. To curb speculation, the government has proposed capping loans for second and third property purchases.
Other steps to tackle the shortage, such as a Ho Chi Minh City plan to develop 235,000 new homes during 2021 to 2025, have fallen short. Nationwide, newly approved housing projects declined sharply to 79 last year versus 743 in 2020, construction ministry data show.
It’s even prompted a call to action from Prime Minister Pham Minh Chinh, who last month promised to cut costs and simplify administrative procedures. Chinh admitted that a goal of completing 100,000 social housing units this year is a major challenge, with half of Vietnam’s regional areas set to miss targets.
“The market is currently meeting less than 20 per cent of the actual housing demand driven by population growth,” Savills’ Huong said. “Demand is rising steadily each year, but supply lags.”
Previous auctions for the Thu Thiem resettlement units set the reserve price as high as 9.9 trillion dong, according to local news website VnExpress. The price for this round, which runs until early 2026, has yet to be disclosed.
To avoid the challenges of individual sales, the apartments are being sold in blocks, meaning things such as building repairs and investment in shared facilities and green spaces can be borne by a developer.
“This auction may have a higher chance of success,” HoREA’s Chau said. “Developers may propose planning amendments or even knock down the existing structures to rebuild from scratch.” BLOOMBERG
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