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Many people who want to buy a home for themselves say that they want the price of a condominium to be below 2.5 billion VND/ unit. At this time, it is easy to find luxury condominiums, but it is difficult to find affordable ones. With newly launched projects, the prices of condominiums are only for the wealthy.
Severe imbalance in product structure
Recently, there has also been some information about new projects being opened for sale, but at high prices, even in the advertisements, they are referred to as luxury condominiums.
For example, the Lumi Hanoi project, without mentioning the price, is introduced to include 9 high-rise buildings from 29 to 35 floors with about 4,000 luxury apartments. Or there are other projects, just reading the prices has made many people shake their heads. For example, the prices of condominiums of Nam Long Investment Joint Stock Company (Nam Long Group) in the Akari City apartment project (Binh Tan district, Ho Chi Minh City) are 45 million VND/m2. In the Mizuki Park project (Binh Chanh, Ho Chi Minh City), the selling price of apartments is 46 million VND/m2.
It can be seen that in the current condominium market, luxury condominiums dominate.
Some recent market research reports from research firms have continuously mentioned the issue of scarcity of affordable housing supply. The scarcity of supply has made it difficult for housing prices to decrease, even increase sharply.
In 2023, the Market Research Group of the Vietnam Real Estate Brokers Association (VARS) conducted a report showing that the supply of commercial housing was “very scarce”. The proportion of affordable housing supply out of the total supply of launched condominiums has continuously decreased, from 30% in 2019 to 6% in 2023.
Regarding the information from the Ministry of Construction, there are almost no projects in the affordable housing segment, with prices below 25 million VND/m2, which mainly consist of medium and high-end condominium segments that meet the conditions for mobilizing capital and trading.
According to Mr. Hoang Hai – Director of the Housing and Real Estate Market Management Department (Ministry of Construction), the 2023 market has many existing problems such as low purchasing power, lack of supply, inappropriate structure, lack of suitable segments for low-income people, many barriers to capital mobilization and bond issuance.
The real estate market has shown a mismatch between supply and demand, a very low supply of projects leading to a very low supply of housing. Based on the actual demand, experts believe that in 2024, the real estate market will enter a new development cycle.
According to the assessment of Ms. Trinh Thi Kim Lien – Business Director of DXS – FERI, the real segment of affordable housing continues to lead the market in the coming years. Ms. Lien believes that the market demand is still quite high. Buyers are still expecting more affordable products to be suitable for purchasing.
Awaiting the race of affordable housing
Mr. Le Hoang Chau – Chairman of the Ho Chi Minh City Real Estate Association analyzed that due to the scarcity of low-priced housing products on the market and the desire of project investors to maximize profits, prices have been pushed up, causing housing prices to always tend to increase.
Recently, many real estate project investors have pushed profit margins up to 30 – 40%. The supply is oriented towards investors more than meeting the residential needs. Pushing prices in the long term will have many negative consequences for the market when the housing needs of the majority of people are not met. Meanwhile, affordable condominiums are the desire of the people.
Mr. Dinh Minh Tuan – a real estate expert in the southern region believes that the real estate sector has been pushed up in price compared to its actual value. Project investors have set product prices for the next 2-3 years when they introduce them to the market, causing selling prices to exceed the purchasing power of the majority of buyers.
According to experts, to reduce housing prices, administrative procedures need to be faster, reducing costs for businesses to create profitable and suitable products for the real needs of people today.
Assoc. Prof. Dr. Dinh Trong Thinh (Academy of Finance) believes that real estate businesses need to consider diversifying and restructuring housing products, strongly shifting to the commercial housing segment at affordable prices, low-priced commercial housing… These are investment and business sectors of real estate that both ensure economic efficiency and have humane social significance, although they have low profitability rates, they have low risk and are beneficial for building the business’s reputable brand.
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Representatives of the Vietnam Real Estate Brokers Association believe that the real estate market in Vietnam will change based on the global economic situation and macroeconomic management. 2024 will be the “foundation” for a new development cycle of the real estate market in Vietnam. The affordable housing segment, especially social housing and affordable commercial housing, will play a strong leading role, leading the entire market from the middle of 2024. From there, it will help the market recover better, approach safe and healthy development.
