In 2015 the average price of a high-end apartment was VND40 million ($1,720) per square meter. It had risen to VND61 million ($2,630) by August, and would continue to increase in the coming months, the firm said.

The average price of a mid-range apartment rose from VND21 million ($900) to VND32 million ($1,380) between 2015 and August 2019, a 52.4 percent increase. But the gain has been slow this year.

In the affordable segment, prices have increased from VND16 million ($690) to VND24 million ($1,030), a 50 percent rise. In the last 12 months they have risen by 9 percent.

Prices are expected to keep rising due to a short supply since projects are taking a lot of time to complete legal procedures even as demand remains strong given the high net migration to the city, DKRA said.

According to real estate firm Savills, total supply, which includes unsold units and newly built units in the city in the last quarter of 2018, fell 44 percent year-on-year.

This number fell by a further 34 percent in the first quarter of 2019 to just over 12,000 apartments, which represents a 57 percent drop compared to the first quarter of 2018. One of the problems the city market faces is the legal difficulty in selling apartments, Le Hoang Chau, chairman of HCMC Real Estate Association, said.

Many projects are stuck at various levels from applying for approval from local authorities and getting permission to begin construction to getting permission to begin selling.

According to the city Department of Statistics, Saigon’s base population at the end of 2018 was 8.85 million people.

Transaction volumes in all segments – affordable, mid-range and high-end housing – have fallen. Absorption rate in this market also fell 8 percent compared to last quarter, Savills said.

The HCMC real estate market had decelerated in the last quarter of 2018, with 11,000 units sold for a 27 percent year-on-year drop.

According to Savills, the downwards trend in consumption seen in HCMC has followed a decline in supply. Total supply, which includes unsold units and newly built units in the last quarter of 2018, fell 44 percent year-on-year.

This number fell by a further 34 percent in Q1 2019 to just over 12,000 apartments, which represents a 57 percent drop compared to Q1 2018.

According to real estate analysts CBRE Vietnam, HCMC saw its one of its worst periods in the second quarter of 2018. Just 7,000 plus units were consumed, mainly due to negative sentiments after a fire at Carina Plaza, a 700-room apartment complex, killed 13 people and injured 28 in March.

Since then, the market had consistently underperformed based on year-on-year comparisons, according to CBRE. New supply in the third quarter of 2018 was just 6,711 units, down 14 percent year-on-year.

Despite seeing a surge in demand in the last quarter, consumption was still 16 percent lower than the same period in 2017, CBRE said.

Average prices of newly built apartments in the first 3 months of the year rose 3.1 percent compared to the previous quarter, and increased by 14.9 percent over the same period last year, CBRE said.

One of the problems facing the Ho Chi Minh City market stems from legal difficulties in selling projects, Le Hoang Chau, chairman of HCMC Real Estate Association, told local press. In fact, there is a lot of supply, but many fail to meet regulatory standards required to begin selling, he said.

Many projects get stuck at various levels from applying for approval from local authorities to getting permission to begin construction and to getting permission to begin selling.

These are major bottlenecks for investors, who just want to sell their inventory as soon as possible to recover capital, said Chau.