Cheap Housing Segment: Serious Shortage

In fact, with the majority of urban residents have low and medium income as today, cheap apartments (under 1 billion) can meet the ability to spend Check.

However, nearly 2 years ago, the purchase of houses with this price is increasingly difficult as “find the bottom of the tank.” This indicates a serious shortage of affordable housing segment, not meet the growing demand of people.

“Thirsty” cheap house

Most investors and real estate businesses have recognized that the segment of low-cost commercial houses of small and medium size (1-2 bedrooms) with the selling price of less than §43.478 is still a sustainable development, the pillar of the market, meeting the real needs of the majority of people. However, with the current demand, people with “red eyes” might not find any project of this type of apartment.

In the Hanoi market, the supply of apartments is still high, mostly in the Northern districts of Tu Liem, Nam Tu Liem, Ha Dong … which accounts for 63% of the total new supply. In which there are many real estate projects offered such as Viet Hung Green Park, Ecolake View, Imperial Plaza … However, there are no more affordable housing projects, new social housing.

According to some market research agencies such as JLL, CBRE estimates that the apartment market is expected to maintain a high absorption rate between 2017 and 2019, especially the absorption rate of the popular oscillating segment from 40 to 50%, can reach 60% by 2017. The price of affordable housing is stable.

cheap housing

Cheap housing supply is not enough to meet the real needs of people

In addition, the state-owned housing development firms only meet 15% of the housing supply for immigrants. The remaining people have to worry about themselves and these people are in need of affordable housing, ranging from $30.435 to $43.478. The supply of affordable homes is hundreds of thousands of units that do not penetrate the demand for millions of units.

Experts Dang Hung Vo said that the real estate market is developing quite stable. Cheap houses are the only segment that has never experienced a crisis, although the rate of secondary investors is extremely low the liquidity is most stable in the market. But most projects are still in the middle segment and on average, affordable housing is still scarce. Demand for low-income housing in urban areas is projected to be 1 million units by 2020, while it currently only meets more than 10,000 units a year.

>>>See more information about the real estate law, here: Vietnam real estate law

Difficult to increase supply

cheap housing

The low-end segment can still offer many opportunities if the developer builds an effective strategy, owns the well-connected land,…

According to Stephen Wyatt, General Director of Jones Lang LaSalle (JLL) Vietnam, popular housing in Ho Chi Minh City and Hanoi has long been overlooked by real estate developers. It is difficult for the low-end segment to invest in low-cost housing, but it is still cheap commercial housing and not a social housing. Therefore, in order to lower the price, investors in this type of project will surely have to choose the design of the apartment area is small, make full use of construction targets, easily cause overload capacity Response of technical infrastructure inside and outside the project area. But, the low-cost segment can still offer a lot of opportunities if the developer builds an effective strategy, owns a land location with good infrastructure connectivity, low-cost control and offers The selling price is suitable with the buyer’s ability to pay…

According to JLL, the segment of affordable housing is the backbone of the housing market. Featured is the huge demand, stable prices, less speculation, most customers are buyers of the final product. However, this segment is unlikely to increase the supply strength because the market factor is not high, depending very much on the State support that the ability to help is always limited, businesses do not enjoy many advantages.

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