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Thu Duc City set to be new growth pole for HCM City

Like Gangnam south of the Han River in Seoul and Pudong east of the Huangpu River in Shanghai, Thu Duc City is expected to become a new growth area for HCM City.

Truong Hoa Binh, Deputy Prime Minister, has agreed on the establishment of Thu Duc City which will include districts 2, 9 and Thu Duc.

 

 

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Nearly 10 years ago, HCM City put forward the idea of setting up ‘a city within a city’, when proposing to create a policy for ‘four cities – East, West, South and North’. Each ‘city’ would have its own urban government and the governments would belong to the HCM City authority.

The cities would be designed in a way to enjoy strong decentralization, with increased high autonomy and self-responsibility, so as to create independent and proactive development.

Experts said Thu Duc has advantages compared with other administrative zones, especially well-invested transport infrastructure.

They support the idea of developing a new city, saying that the ‘new city’ model has been used in other countries for a long time. Cities have always been seen as an effective engine of economic growth and innovation.

Gangnam district in Seoul and Pudong in Shanghai are two examples. They were once underdeveloped areas in the 1980s, but after a strong investment period, both have become new economic and financial centers.

Billions of dollars ready for disbursement

The local real estate market has seen some changes thanks to the ‘Thu Duc City effect’. The apartment prices in the area have increased from VND30 million per square meter to VND45 million on average, a 45 percent increase in three years.

Le Hoang Chau, chair of the HCM City Real Estate Association (HOREA), said the attractiveness of the Thu Duc City project lies in rapid infrastructure development and future programming. District 9, for example, has been invested in heavily to connect with the city centre and provinces in the southeast region.

The area has a good living environment, and can attract technology firms from other countries, thus leading to an increase in the number of migrants, specialists and workers.

Dinh of HOREA believes that the establishment of Thu Duc City will help stimulate economic development in HCM City. It will also be a new driving force for real estate development.

The local real estate market has seen some changes thanks to the ‘Thu Duc City effect’. The apartment prices in the area have increased from VND30 million per square meter to VND45 million on average, a 45 percent increase in three years.

The land price has also increased by VND10-20 million per square meter to VND90-110 million per square meter. The land plots in district 2 have seen prices increasing slightly by VND10 million per square meter compared with 2019.

The price of land plots on Song Hanh road is at VND250-350 million per square meter, while it is VND300-380 million for land plots on Tran Nao Road.

“The prices will continue to increase as there is a plan on establishing a new city here,” a broker said.

CBRE Vietnam confirmed that land prices in districts 2 and 9 have increased very rapidly, by 2-3 times in some locations, in the last two years.

DKRA Vietnam’s Q2 report about the real estate market also showed that the land in the eastern part of the city continues to lead in terms of new supply and demand, accounting for 74 percent of new supply and 85.7 percent of consumption. 

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