Because of procedural bottlenecks, these businesses can’t sell commercial apartments for many years. For social housing projects, the Real Estate Association recommended that the municipal People's Committee need to resolve the bureaucratic procedures as quickly as possible.
According to the report of the first quarter of 2022 on the real estate market in Ho Chi Minh City and its vicinity published by Cushman & Wakefield Vietnam Real Estate Group, the average apartment price in the realty estate market including all segments reached US$3,300 per square meters, equivalent to VND75.4 million, up 8 percent quarter-on and 27 percent year-on-year.
Cushman & Wakefield Vietnam also revealed that apartment prices have continuously increased in the past 10 years, mainly due to the increase in land prices in the context of limited land funds and the rising cost of construction materials. At the same time, the market received many products in the luxury and ultra-luxury segments and boosted the average price. Notably, the selling price of townhouses in Ho Chi Minh City is three times higher than in neighboring provinces. Specifically, the average selling price in Ho Chi Minh City was $7,580 per square meters, equivalent to VND173 million, up 30 percent quarter-on-quarter and 42 percent year-on-year.
According to Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, the Ho Chi Minh City market in the first three months of this year witnessed a tight supply. Meanwhile, the market demand is huge. This has pushed up house prices. It is forecasted that in 2022, it is unlikely that apartment prices will go down, especially when the supply is scarce. Worse, inflation and rising construction material costs will continue to push up apartment prices.
According to the Real Estate Association of Ho Chi Minh City, for many years, businesses have negotiated for site clearance to have a clean land fund and financed themselves including loans with commercial interest rates to invest in social housing projects but they encountered legal problems. For instance, construction of social housing projects Le Thanh - Tan Kien, social housing project Le Thanh - Tan Tao 2, Nam Ly social housing project, social housing project for lease Linh Trung Export Processing Zone 2 can start in the first six months of this year if the legal problems are removed by the departments, districts, and Thu Duc city; therefore, the city has an additional 5,209 apartments for employees in the period 2024-2025.
A score of projects that have been locked up for a long time has negatively impacted the real estate market in Ho Chi Minh City resulting in the sharp decline in housing supply, while house prices increased continuously 2-3 times in the past year.
Therefore, it is very necessary that real estate and commercial housing projects are not against legal review and are under inspection, the city authorities should remove the barriers to create conditions for investors to continue implementing the project, pay land use fees, and be granted ownership certificates for home buyers. This is also a way to help increase housing resources to serve the huge needs of the market and increase revenue for the state budget.