Homebuyers in Vietnam’s capital city are paying up to $185 per square foot for apartments this year whereas new apartments in wealthier Ho Chi Minh are selling for as low as $45.
That’s because of differences in real estate and banking practices; construction efficiencies; bureaucracy; and scarcity of land that has led to much higher land prices in Hanoi — up to $225 per square foot in prime locations; that drives costs for single family houses into the range of $600 per square foot. In contrast, highest prices for houses in HCMC are about $380 per square foot.
A major difference between the two cities is greater access in Ho Chi Minh City to bank loans that lead owners to sell real estate projects at lower prices. Real estate loans in 2010 totaled nearly $11 billion, accounting for nearly half of bank loans in Saigon (HCMC) compared to 16% in Hanoi.