According to the Department of Construction of Ho Chi Minh City, in the first 11 months of 2024, Ho Chi Minh City only had 12 housing projects approved for investment policy at the same time as investor approval, of which there was only 1 social housing project.
No commercial housing projects or social housing projects were allocated land or leased land, and only two commercial housing projects were granted construction permits, and no social housing projects were granted construction permits.
Since the beginning of the year, Ho Chi Minh City has only had 31 commercial housing projects under implementation with 31,167 apartments, only about 1/3 of the number of projects implemented annually before.
There are 4 commercial housing projects eligible to raise capital to bring products to the market, reducing the number of projects by 75% with a total of only 1,611 houses.
All are high-end housing (a 90% decrease in the number of houses compared to the same period in 2023, when there were 19 commercial housing projects with 17,753 houses on the market).
Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) - said that this is the first time the high-end housing segment has dominated the entire Ho Chi Minh City real estate market and at present, the market no longer has a supply of mid-range and affordable housing (new) at affordable prices in commercial housing projects. This further distorts the housing product structure in the city's real estate market, failing to meet the real housing needs of the majority of middle-income and low-income urban people, and the market is developing unsustainably, unsafely and unhealthy.
The investor of a real estate project in Ho Chi Minh City said that it is very difficult to implement affordable commercial housing projects at the current stage.
Project development costs are escalating, land funds are increasingly expensive and scarce, especially in large cities like Hanoi or Ho Chi Minh City, so it is not suitable for developing the low-cost segment.
"All input costs are currently very high, the highest of which are land fund creation costs, land use fees, not to mention many other unnamed costs.
Not to mention that following common construction standards also increases costs. Therefore, instead of building low-cost housing, investors are positioning themselves for the high-end segment, because with the same amount of effort, building a high-end project brings better economic efficiency," said the investor of this project.
According to Mr. Le Hoang Chau, data shows that the average house price of 1,611 houses in 4 high-end housing projects launched on the market in the first 11 months of 2024 has reached 9.39 billion VND/house, and this is only the "primary house price" because the investor registered the house price with the Department of Construction when establishing the investment project, so the actual house selling price on the market will certainly be higher.
The continuous increase in housing prices in recent years is due to the limited supply of commercial housing projects, leading to a continued shortage of commercial housing products according to the law of "supply - demand" with an increase in apartment prices of about 15-20% in the period 2015-2023 and according to the Ministry of Construction, with the "Adjusted Land Price List" in 2024, housing prices may increase by 15-20% in 2025.
Businesses believe that to address the shortage of affordable housing supply, the State needs to research and develop policies to exempt land tax, corporate tax or increase construction density or land use coefficient compared to standards for affordable commercial housing projects, while giving priority to planning approval and construction permits, helping to shorten project development time, thereby reducing investment costs.
