In many large cities, especially Hanoi and Ho Chi Minh City, the problem of housing suitable for people's affordability is still unanswered as real housing demand remains high but supply is increasingly limited.
Ms. Hoang Thu Hang, Deputy Director of the Housing and Real Estate Market Management Department (Ministry of Construction) said that one of the major problems of the current market is that real estate prices are far exceeding the income of most people. The reasons are not only from land prices and input costs, but also related to speculation, "price inflation" and lack of transparency of market information.
To overcome this situation, the Ministry of Construction is deploying a national database system on housing and the real estate market, expected to operate synchronously from July 1st. The system will publicize project legal information, planning, transactions and real estate transaction prices to increase transparency, limit speculation and reduce unreasonable price increases.
Meanwhile, Mr. Ngo Quang Phuc, General Director of Phu Dong Real Estate Joint Stock Company, said that the affordable housing segment still has very high demand, but the supply is seriously lacking due to many prolonged barriers.
According to Mr. Phuc, if previously affordable apartments were priced at about 1-3 billion VND, now the average price has increased to about 2-5 billion VND/unit. "There are suitable products that are almost out of stock even without selling," he said.
However, to develop this product line, businesses are forced to move to the suburban area because they are almost unable to create a reasonable land fund in the central area of Ho Chi Minh City.
Phu Dong leaders believe that although there is still a lot of land in the suburbs, finding land suitable for planning, at a reasonable price and eligible for project development is not easy at all. Meanwhile, the legal completion process may take 3-5 years, making the supply increasingly limited.
Mr. Ngo Quang Phuc assessed that the strong development of transport infrastructure is opening up great opportunities for the mid-range housing market in the suburban areas of Ho Chi Minh City. The trend of population expansion to the East, West and North of Ho Chi Minh City is increasingly clear thanks to improved transportation systems, helping to shorten travel time.
According to Phu Dong CEO, in the context of young people increasingly prioritizing living in apartments, real estate businesses must not only compete in price but also pay attention to quality of life, amenities and project operation capabilities after handover.
An urban area that wants to be attractive must have convenient traffic connections, full living amenities, transparent legal status and be operated well after residents move in," Mr. Phuc said.
Sharing the same view, Ms. Cao Thi Thu Huong, Deputy Director of Research and Consulting Department of Savills Vietnam, said that the real estate market is entering a stage of "strong differentiation and natural selection", when cash flow, supply and demand all change significantly compared to the hot growth period before.
According to Ms. Huong, the prolonged shortage of affordable housing is causing real housing demand to be compressed, while promoting the trend of population migration to satellite cities, where there is still room for land fund development and more suitable prices.
Savills assesses that in the coming period, metro projects, ring roads, inter-regional infrastructure and urban development models associated with public transport (TOD) will continue to be the biggest driving force of the market. Infrastructure not only promotes economic development but also plays a role in dispersing population from the core urban area.
