Scarcity of affordable apartments

According to experts and managers, the real estate market in the first 6 months of 2018 has had a clear imbalance between supply and demand, the supply of affordable apartments has decreased sharply while luxury apartments have increased. According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, in 2017, the luxury apartment segment accounted for 31.3%, mid-range 31.1%, affordable 37.6%, but in the first 6 months of this year, the opposite was true, the luxury apartment segment accounted for 41%, mid-range 39%, affordable only 19.9% with 1,914 apartments. Mr. Tran Tuu, Deputy General Director of Hung Thinh Corporation, said that the high supply of luxury apartments is due to high costs, so products brought to the market must be at high prices.

Many customers are looking for an average apartment project in Ho Chi Minh City.

Mr. Phan Truong Son, Head of the Housing Development Department of the Department of Construction, explained many reasons for this phase, including the suspension of the state's support policy for the real estate market. The supply of affordable apartments has decreased, but people have a need to buy low-priced real estate, suitable for their budget, so they have switched to buying land, receiving land use rights transfers to build their own houses. "The recent market belongs to opportunists and brokers. They have created a virtual fever, specifically increasing according to progress partly but this rate is only 5%, but if it increases more than 15%, I think it is abnormal, virtual" - Mr. Son emphasized. Mr. Le Hoang Chau also said that the virtual fever of the land market has been basically controlled, even in special zones or suburban areas of Ho Chi Minh City. "People who are holding land are still holding it at a high price because they still hope there will be buyers. However, this cannot last because many buyers use loans, their endurance is limited" - Mr. Chau said.

Talking about the 10-year crisis cycle, experts all affirm that there will be no bubble until 2019 thanks to macroeconomic factors as well as state policies that have created conditions for the real estate market to be stable and sustainable. According to Mr. Nguyen Duc Lenh, Head of the General Department of the State Bank of Vietnam, Ho Chi Minh City Branch, credit growth in the city in the first 6 months of the year was 7.5% while the whole country increased by 7.8%; outstanding real estate credit was about 10%, the whole country 7.8%. This is still a safe level. At the same time, the State Bank's credit and monetary policy in the past 5 years and the first 6 months of the year has created favorable conditions for economic development and market stability, recommending that banks control cash flow into real estate rather than tightening monetary policy. That is a good mechanism for the consumer real estate market.

Source: https://nld.com.vn/kinh-te/khan-hiem-can-ho-vua-tui-tien-20180718203858441.htm