HCMC in surplus of high-end apartments, scarcity of affordables

Up to 74% of apartments for sale in Ho Chi Minh City last year were high-end, luxury or ultra luxury, while the city faced a serious dearth of affordable housing supply.

Since 2020, supply of affordable apartments has seen a deep dive, making for only 1% of total units launched onto the market.

In 2021, of the 14,443 aparments for sale, "none is affordable", the HCMC Real Estate Association (HoREA) reported.

This is the first year since the beginning of a new growth cycle of the real estate market (2016 until now), the category of affordable apartments had no representative for sale in the market.

In contrast, 10,404 units or 73.98% were high-end, luxury or ultra luxury, and the remaning or 26.02% were mid-end products,

According to the HoREA report, affordable apartments are priced at around VND25 million ($1,090) per square meter. It is VND25-40 million per square meter for mid-end units, and from VND40 million to hundreds of millions of dong for high-end, luxury and ultra luxury products.

HoREA said the product structure in 2021 showed that the housing supply-demand mismatch reached its peak and at an alarming rate. With affordable housing gradually disappearing while the risk of oversupply of high-priced housing is evident, the market falls into a state of unbalanced and unsustainable development.

The association also warned that the virtual fever of land prices associated with house and land speculation in 2021 showed signs of returning in the first two months of the year. "Therefore, local administrations need to promptly and decisively handle the dishonest intermediaries and businesses to prevent negative consequences."

HoREA noted there needs to be synchoronous policies in 2022 to encourage affordable housing development so as the market could be balanced and social security ensured.

The association said the business community very much expects the National Assembly to make a turning point in law-making in 2022 as it is set to appraise the draft amended Housing Law, the draft amended Property Business Law Project and the draft amended Land Law, as well as amend and supplement a number of provisions of the law on planning.