Although they were mentally prepared for the increase in housing prices in Ho Chi Minh City, those looking for a place to settle down were still surprised by the new prices at the projects they had just been introduced to.
While mid-range apartments only appear in projects on the outskirts of the city, the affordable apartment segment has almost "evaporated" from the market.
The real estate market report in October 2024 by DKRA Group Joint Stock Company shows that primary selling prices in the apartment segment continue to remain high due to pressure from input costs.
Some projects in provinces bordering Ho Chi Minh City recorded an increase of 3%-8% compared to the previous open sale basket, 3-6 months apart.
In Ho Chi Minh City, the highest apartment selling price was up to 493 million VND/m2, the lowest was 30 million VND/m2. Most apartment segments recorded an increase in secondary selling prices in the third quarter, of which the luxury apartment segment had the most outstanding price increase, with an increase of nearly 10% compared to the same period last year.
Data from the Vietnam Real Estate Brokers Association shows that the affordable apartment segment (priced under VND25 million/m2) - affordable housing - has become "extinct" in the past few years, and is very difficult, even impossible, to reappear in Hanoi and Ho Chi Minh City.
The main reason why affordable housing has not received much attention from real estate developers is because the profit margin from this segment is lower than that of the high-end segment. To build affordable housing, it is necessary to optimize costs from land fund, construction to operation.
Experts say that to increase the supply of affordable housing, the State needs practical policies. The State should promote cooperation projects between the Government and the private sector to build low-cost housing. The private sector will undertake most of the construction and development process, while the State provides land incentives and legal support.
The Government has also recently proposed that the National Assembly consider a draft Resolution on piloting the implementation of commercial housing projects through agreements on receiving land use rights or having land use rights, including a 5-year pilot program for investors to agree to receive land use rights for agricultural land, non-agricultural land that is not residential land, and other land in the same plot to carry out commercial housing projects.
This pilot is considered a step to resolve difficulties in the supply of real estate projects in the context of high prices due partly to difficulties in accessing land.
Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) - suggested that priority should be given to piloting enterprises that receive land use rights transfer or have land funds to build affordable commercial housing projects that are suitable for the local economic situation. This, according to Mr. Chau, will promote the restructuring of housing products that are out of sync with the high-end segment, helping the market develop safely and sustainably.
