Real estate supply drops

According to the Department of Construction of Ho Chi Minh City, from the beginning of last year to now, it has verified 42 projects that are eligible to raise capital for future products of 23,046 houses, including 21,821 apartments, 883 houses and 342 villas, worth more than VND56.25 trillion.

Of which, 5,472 high-class houses accounted for 23.7 percent; 5,208 middle-class houses held 22.6 percent, and 12,366 affordable houses took 53.7 percent. The housing projects concentrate most in District 9 with nine projects, District 7 with eight projects, District 2 with six projects and Binh Chanh District with four projects.

As for the development of commercial housing projects, the department has asked for the approval of the People’s Committee of Ho Chi Minh City for 12 commercial real estate projects, down 59 projects compared to that in 2018, of which there are four new and seven adjusted projects and a commercial housing project with residential land use rights. In addition, the number of construction permits issued in 2019 also dropped sharply by 2,068 construction permits, compared to the previous year.

This year, the department plans to develop an additional 8 million square meters of residential floor area, increasing total floor area in the city to 190.19 million square meters and the average residential area is 20.6 square meters per person; start construction and build ten apartment buildings; demolish 12 badly damaged apartment buildings and complete the relocation of 550 households of nine grade-D-damaged apartment buildings.

Recently, the Ho Chi Minh City Real Estate Association has also asked the municipal People’s Committee to resolve difficulties soon to help the real estate market to develop sustainably. Accordingly, the committee should soon review and resolve problems under the city’s authority, especially the process and procedures for investment in the construction of housing projects, this will help the city’s real estate market to have opportunities to recover and grow again. The city’s leaders should meet real estate enterprises quarterly to timely resolve difficulties and problems and direct the real estate market to develop steadily and healthily.

The real estate business community must set a target of sustainable development, obey the law, respect the legitimate rights and interests of customers and have social responsibility. They should also switch to develop green and smart real estate, zealously participate in the programs on relocation of houses on and along the canals, programs on reconstruction of old apartment buildings, social housing programs, the project to develop innovative urban area in the East of the city and the urbanization plan to upgrade outskirt districts to districts, contributing to changing the quality of the city’s real estate market.

According to experts’ forecast, with the help to resolve difficulties and problems of the central and municipal authorities, the real estate market will possibly recover and post growth again as of the third quarter of this year with better transparency, fairness and healthiness than before. This year, there is little risk of a real estate bubble but there might be a hike in prices in some places where there is planning for urban development and transport development. In the first six months of this year, real estate enterprises might continue to face difficulties and challenges. The market segment for one-to-two-bedroom commercial apartments with an approximate price of VND2 billion per unit continues to keep the leading role in the real estate market. In addition, the supply of social housing projects will increase this year.