How long will the housing supply shortage in Ho Chi Minh City last?

In 2025, Ho Chi Minh City is projected to continue facing a housing shortage, despite the government's efforts to remove legal obstacles for projects. When will Ho Chi Minh City's housing shortage end?

Inside a commercial housing project under construction in District 7 (Ho Chi Minh City) - Photo: NGOC HIEN

At the seminar "Real Estate 2025: The Road to a New Decade of Growth" organized by the Ho Chi Minh City Business Association (HUBA) on December 18th, Ms. Duong Thuy Dung - Senior Director of CBRE Vietnam - stated that the supply of apartments in Ho Chi Minh City in 2025 will increase only slightly, by approximately 9,000 units.

This is a low figure compared to previous phases before the market launch, which saw approximately 30,000-40,000 units per year.

The number of housing units offered for sale in Ho Chi Minh City is meager.

According to Ms. Dung, in 2025, the whole country will have about 40,000 houses launched onto the market, with Ho Chi Minh City accounting for only about 20% of the market's supply, and this situation will continue until 2026 when the city will only have about 11,000 new houses for sale.

Ms. Dung noted that the current market supply trend is repeating the cycle of the previous 10 years. 2024 will be a pivotal year with the enactment of laws related to the real estate sector, and 2025 will be the beginning of a new development cycle.

Therefore, Ms. Dung believes it will take at least another two years for the market to enter a phase of accelerated growth and a supply surge like the previous period, at which point the supply will improve.

Meanwhile, Mr. Pham Dang Ho, head of the Housing Development and Real Estate Market Department of the Ho Chi Minh City Department of Construction, said that approximately 10,000 social housing units will have their investment plans approved, about 7,000 units will be put up for bidding to select investors, and about 3,000 units will be invested from public funds in 2025.

According to Mr. Ho, Ho Chi Minh City is aggressively developing social housing and implementing solutions such as bidding for land funds, utilizing land funds registered by businesses, and public investment to increase supply. In addition, Mr. Ho also predicted that real estate prices in Ho Chi Minh City will continue to rise slightly in 2025 due to increasing land prices.

"The increase won't be too significant due to limited supply and the lengthy construction permit process. Most new supply remains concentrated in the high-end and luxury segments, making it difficult for prices to fall," Mr. Ho said.

Removing legal obstacles: An insufficient "remedy" for Ho Chi Minh City's housing market.

At the seminar, experts argued that Ho Chi Minh City faces a significant imbalance between supply and demand, as the supply of real estate, especially affordable housing, has not yet met market needs. Meanwhile, property prices continue to rise, creating difficulties for people with average and low incomes.

Furthermore, despite improvements, administrative procedures remain complex and time-consuming. Therefore, experts agree that policies are needed to promote housing prices that align with demand and expedite administrative procedures; a sufficiently strong "remedy" is needed to remove procedural obstacles.

Mr. Le Huu Nghia, General Director of Le Thanh Company, stated that housing prices will be difficult to reduce if investment procedures for housing, including social housing, drag on for years. Therefore, Mr. Nghia suggested that solutions are needed to expedite administrative procedures, implementing them simultaneously instead of sequentially, which takes a long time.

Mr. Nghia believes that if the project licensing process is expedited, unnecessary administrative procedures are minimized, and businesses are given favorable conditions for project investment, then the housing supply will improve, and Ho Chi Minh City will alleviate its housing shortage.

Mr. Nguyen Ngoc Hoa, chairman of the Ho Chi Minh City Business Association, believes that government agencies need to expedite procedures and remove legal obstacles, while businesses need to review their business strategies and accurately assess market segments to increase housing supply.

Source: https://tuoitre.vn/nguon-cung-nha-o-tp-hcm-se-khat-den-bao-gio-2024121818103821.htm