Even if 1 million social housing apartments are completed before 2030, supply still cannot meet demand.

1 million social housing apartments, supply still cannot meet demand

According to the VARs report, the number of transactions in the whole market has increased gradually over time. Specifically, in the second quarter of 2023, the market recorded 3,700 transactions, an increase of 37% compared to the 2,700 in the first quarter.

By the third quarter, the market recorded nearly 6,000 transactions, 1.5 times higher than the second quarter and more than twice that of the first quarter of 2023. However, in the first 9 months of 2023, the number of transactions was only about 50% compared to the same period last year and about 20% compared to the land fever period.

If 1 million social housing apartments are completed before 2030, it still won't meet the 1 million social housing requirements. — Even if 1 million social housing apartments are completed before 2030, supply still cannot meet demand. (Photo: VXD)

VARs commented that this shows that the market is showing signs of recovery in certain segments, but the speed is still slow.

There are signs of "bottoming out" in some segments. For example, the housing segment in big cities has shown signs of bottoming out, concentrated in the apartment segment and housing priced under 10 billion VND in the central core area.

The land segment has not shown any positive signs but has shown signs of bottoming out in the auctioned land segment. In the area around Hanoi, the price is around 2 billion VND, with an absorption rate of 70% - 80% with the auction price being about 5% higher than the starting price, and can be transferred immediately with a difference of 30 - 50 million VND/plot. Meanwhile, the resort real estate segment is still gloomy.

VARs said the reason is that the market still lacks supply of social housing and affordable housing segments, as housing prices are continuously increasing and show no signs of stopping.

Besides the lack of suitable supply, current difficulties and obstacles related to legal issues have not been resolved, so the market cannot be "untied".

Mr. Nguyen Dinh Cuong, Head of Market Research and Investment Promotion Consulting Department of VARs, said that currently, the supply is still stuck, and only about 10% of projects have had difficulties and problems resolved.

Therefore, Mr. Cuong recommended that there should be mechanisms and policies to improve supply for the market, especially the affordable housing and social housing segments.

Meanwhile, Mr. Nguyen Hoang Nam, an expert from VARs, said that recently, the Government has approved a project to develop 1 million social housing apartments by 2030. Some opinions say that if this task is carried out, it will be a factor that helps the market regain balance.

However, Mr. Nam commented that even if the project of 1 million social housing units is fully implemented, the supply of social housing will still not be able to meet the demand. Meanwhile, in reality, the process of implementing, constructing and selling social housing projects still has many problems, from legal mechanisms to regulations and purchase conditions as well as cases eligible for policies.

Therefore, Mr. Nam suggested that housing policies should target all classes in society. Regulations on beneficiaries of social housing policies should be changed to be more appropriate. Social housing is not for sale to the rich, but should target those with taxable income, savings, but cannot access commercial housing currently priced at a high threshold.

Market unlikely to recover in Q4/2023

VARs experts believe that although there has been more "participation" of some "leading birds" in implementing social housing and commercial housing projects.

If 1 million social housing apartments are completed before 2030, it still won't meet the 2nd requirement. — The real estate market is unlikely to recover in the fourth quarter of 2023. (Photo: MD)

However, the real estate market in the fourth quarter of 2023 will hardly record a sudden change in the short term because the supply has not been able to "breakthrough", because the projects need a relatively long time to be able to deploy and meet the conditions for opening for sale. The number of social housing projects that will be opened for sale in the near future is still very small compared to the demand.

Mr. Tran Van Binh, General Secretary and Vice President of VARS, shared that, along with legal and capital bottlenecks, "customer and investor confidence" is the "last barrier" that needs to be resolved so that the real estate market can truly return to normal .

The real estate market in the fourth quarter of 2023 will be a stepping stone for the transformation in 2024. The overall market picture will certainly have many new bright spots.

“Especially in areas with much room for development, with synchronous and modern planning, infrastructure that is focused on investment, and prices that are not high,” said Mr. Binh.

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