The Metro Line 1 Ben Thanh – Suoi Tien – the first metro line in HCMC, stretches nearly 20km, with a total investment exceeding 40 trillion Vietnam dong (equal to 1,7 Billion USD). This line plays a crucial role in the city’s transportation infrastructure development strategy. With the convenience it brings, it is forecasted to increase real estate prices along the metro route within Ho Chi Minh City.

The history of constructing the Metro Line 1

Metro line 1 – 16 years of approval, 12 years of implementation

• In 2007, the Metro Line 1 project (Ben Thanh – Suoi Tien) became the first metro line approved for construction in Ho Chi Minh City. The Vietnam Railways Administration sanctioned the project, with an estimated total investment of 17.387 trillion Vietnamese dong.
• In 2009, the project consulting unit NJPT from Japan recalculated the budget, increasing it to 47.325 trillion Vietnamese dong. Of this amount, Japanese ODA loans accounted for up to 88.4%, equivalent to 41.834 trillion Vietnamese dong, while Ho Chi Minh City contributed the remainder. The project’s budget increase by 2.7 times posed significant challenges.
• It wasn’t until August 2012 that the project officially began, with an expected completion date of 2018.
• However, due to various challenges encountered during the implementation process such as funding difficulties, slow progress in land clearance, and the impact of the COVID-19 pandemic, the project finally reached completion at the end of 2024. The Ho Chi Minh City Urban Railway Management Authority (MAUR) has scheduled the trial run for October 2024.

The advantages and benefits offered by Metro Line 1

Metro Line 1, connecting Ben Thanh to Suoi Tien, spans a total length of 19.7 kilometers, comprising 14 stations, including 11 underground and 3 elevated ones. Stretching from Ben Thanh, the heart of District 1, it traverses central districts such as District 3, Binh Thanh, and Go Vap before reaching Suoi Tien in Thu Duc City. The line will link the city center with surrounding areas swiftly, conveniently, and time-efficiently.

In addition, Ho Chi Minh City has proposed to apply the development of Transit-Oriented Development (TOD) along Metro Line 1. TOD is an urban development model in nearby areas within walking distance of transit stations. This ensures a high volume of metro passengers and enhances the attractiveness of real estate in the TOD area.

Will Metro Line 1 boost Ho Chi Minh City’s Real Estate Value?

Across the world and throughout history, it has been observed that operating a metro line tends to drive up real estate prices along its routes.

Globally trends

Following the introduction of metro lines, real estate prices have consistently increased in numerous locations worldwide. For example:

• The Metropolitan Railway – the world’s first underground railway established in England in 1863, which contributed to making London the economic center of Europe and the world.
• Similarly, in New South Wales (Australia), property prices along the Sydney Metro Northwest line are nearly triple the national average.

Ha Noi, Vietnam

The Cat Linh – Ha Dong metro line serves as a prime example of how metro infrastructure has increased real estate values. According to the Gachvang real estate report, within just one year (2017-2018), property values along both urban railway lines, Cat Linh – Ha Dong experienced a significant growth trend, ranging from over 20% to more than 100%

According to CBRE, following its commencement in early November 2021, property prices along the metro line have increased 5-10%.

Ho Chi Minh, Vietnam

According to a report by CBRE, from 2012 to 2016, the selling prices of real estate projects in areas with metro line 1 passing through experienced significant increases compared to other area, ranging from approximately 150 to 200%. This demonstrates that Metro Line 1 from Ben Thanh to Suoi Tien has helped increase the value of real estate along this route.

As this railway line becomes operational, many stakeholders anticipate ongoing benefits for real estate prices in HCM City, particularly in the Thu Duc area and along the metro line, in the foreseeable future.

Overall

By October 2024, despite encountering numerous challenges and delays, Metro Line 1 will undergo trial runs and become operational in the near future. Throughout history and globally, the Metro Line has spurred an undeniable trend of increasing real estate values along its route, thanks to the amenities and connectivity it provides.

According to CBRE’s report, residential projects along Metro Line 1 (Ben Thanh – Suoi Tien) have experienced significant growth even during the period when the Metro was not yet completed. Therefore, it is anticipated that real estate prices along the metro line will continue to rise.