Affordable housing supply will increase sharply in Hanoi and Ho Chi Minh City?

Housing supply shortage is the biggest in 10 years

According to recent market information, the Ministry of Construction said that in the fourth quarter of 2023, real estate supply has shifted towards an upward trend. However, overall, real estate supply in 2023 is still limited compared to 2022.

Specifically, compared to the third quarter of the same year, in the fourth quarter of 2023, the number of commercial housing projects eligible to sell future housing was 104.26%; the number of completed commercial housing projects was 119.05%; the number of completed infrastructure construction investment projects to transfer land use rights for housing construction was 188%.

Nguồn cung nhà ở vừa túi tiền sẽ tăng mạnh tại Hà Nội, TPHCM? - 1 — Apartment building on Le Van Thiem Street, Thanh Xuan District, Hanoi (Illustration photo: Ha Phong).

Regarding real estate inventory, the Ministry cited data reported by 53/63 localities showing that the real estate inventory in projects in the fourth quarter was about 16,315 units (including apartments, individual houses, and land).

Specifically, 2,826 apartments; 5,173 individual houses; 8,316 land plots. Accordingly, it can be seen that the inventory ratio is mainly in the individual housing real estate segment and land plots of the projects.

The inventory of the apartment segment in the fourth quarter was about 88.42% compared to the third quarter of 2023; the inventory of the land segment was about 115.66% compared to the third quarter of 2023 and the inventory of the individual housing segment was about 78.93% compared to the third quarter of 2023.

"In general, in 2023, real estate inventory in projects for apartment housing, individual housing and land segments tends to decrease," the Ministry of Construction informed about the real estate market in the fourth quarter of 2023.

According to CBRE Vietnam (part of CBRE International Real Estate Investment and Trading Group), housing supply will continue to be limited in 2023. The supply of newly launched housing in the two major markets of Hanoi and Ho Chi Minh City is at its lowest level in the past 10 years.

While Hanoi has a total of nearly 10,300 apartments and 2,600 low-rise houses for sale (down 32% and 84% respectively compared to 2022), in Ho Chi Minh City, supply has decreased even more sharply, with only a total of more than 8,700 apartments and 30 low-rise houses for sale (down 54% and 98% respectively compared to 2022).

Social housing supply forecast to increase sharply

Many real estate experts also expect that this year, new supply will grow again in the two major cities of the country. In particular, the supply of social housing is forecast to increase sharply because the Government's target for developing this housing segment this year is very high.

Forecasting the real estate market this year, Mr. Nguyen Van Dinh - Chairman of the Vietnam Association of Realtors (VARS) - said that confidence in the market will gradually be restored when about 20 mechanisms and policies to support the real estate market issued in 2023 will "absorb" and have a positive impact. In addition, the record low interest rates of banks in 2023 will cause a large amount of money to find more attractive investment channels, including real estate.

Nguồn cung nhà ở vừa túi tiền sẽ tăng mạnh tại Hà Nội, TPHCM? - 2 — An apartment project is being implemented in Ha Dong district, Hanoi (Photo: Ha Phong).

According to Ms. Duong Thuy Dung - Managing Director of CBRE Vietnam - this year, new supply is expected to grow again in the two cities of Hanoi and Ho Chi Minh City. In the short term, supply continues to be limited, while high demand will keep selling prices at high levels.

The Hanoi market is expected to record nearly 16,000 new apartments and more than 6,000 low-rise houses for sale. Meanwhile, in Ho Chi Minh City, supply is expected to remain limited, welcoming more than 9,000 apartments and 1,000 low-rise houses respectively.

Previously, experts assessed that the real estate market this year was expected to recover, especially when a series of important laws were passed. Policy and legal factors are in the process of being revised and passed, ensuring consistency and unity will contribute to improving market confidence.

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