Ho Chi Minh City: real estate needs a good operation model

HCMC real estate market is shaped like a megacityCurrently, the city’s real estate market is experiencing many shortcomings. To operate better, Ho Chi Minh City needs a unique mechanism.

According to the latest report of HCM City Real Estate Association (HoREA) about real estate market in the first 10 months of 2017. Over the past nine months, the city has added 8.01 million square meters of residential space. Raising total housing area in the city to 160.15 million sqm, increasing the average level of 18.73 sqm per person.

According to the report, HoREA said Ho Chi Minh City has the appearance of a megacity with a population of over 13 million. Of these, over 3 million are immigrants.

Ho Chi Minh City with a population of 13 million people. This city has the look of a megacity

HCMC has reached the end of its growth cycle

HoREA said that HCM City real estate market has maintained its growth momentum in recent years. But it has reached the end of this cycle. The market has also begun to show weaknesses, leading to dangers in the future.

According to the report, the type of commercial housing in the city in the past nine months has added 61 new housing projects. With a total increase of 28,639 apartments. In particular, the high-end segment accounted for 7,451 units, accounting for 26% of the structure. Intermediate level reached 13,976 units, accounting for 48.8%, the remaining is popular with 7,212 units, accounting for 25.2%. Thus, the proportion of affordable apartments for most people (medium and low) still accounts for the largest share of 74%. Of the total new apartments launched into the market.

Le Ho Chau, Chairman of HoREA, said that it is a good signal. As both investors and businesses have a quick restructuring of the product, in the direction of strong increase of small and medium sized apartments (1-2 bedrooms).

However, among them, the rate of affordable apartments is still low, only about 25.5%. That number is not able to meet the large and increasing demand of people. Reportedly, the hotel market, services and resorts are growing very fast. In the past time, there have been signs of over-supply, which put a lot of risk for investors.

Types of hotels, resorts and services have shown signs of supply over demand. This is dangerous for many investors

According to this report of HoREA, the virtual land price fever in the first months of 2017 in some suburban districts showed signs of cooling. However, at present, due to scarcity of supply, the land plots are feverish prices are returning in the coastal areas as District 9, Thu Duc, Hoc Mon, Binh Chanh, Nha Be, …

On the whole, HoREA estimates that the property market in the past nine months is still in the recovery and growth cycle. In addition, it has maintained stable development, but has been prepared to stand still. On the other hand, the credit capital of many banks and social capital poured into the real estate market is also very large. This capital tend to deviate into some businesses and into the high-end real estate, vacation resort is the main.

It is predicted that there will be no real estate bubble in the last two months of 2017 until the Lunar New Year and 2018. HoREA said that it is unlikely that these problems will be interfered timely and effective coming from the State.

To develop, it is necessary to have a unique mechanism to differentiate

HCMC contributes one third of the country’s GDP and one third of industrial output, one third of the total budget revenue. For many years, HCMC is also the locality attracted the highest FDI capital in the country, the volume of administrative work is also the largest in our country. A number indicates that in the past 10 months of 2017, the city has issued 414,073 red books and 38,242 construction permits. This number must be many times higher than that of other provinces in our country.

Ho Chi Minh City has sacrificed for the national economy for many years. It is time to remove the “needle ring” to give the city a new chance to develop.

Therefore, HoREArat agrees with the proposal to have a specific mechanism for Ho Chi Minh City. Aiming to build the city, it will soon become one of the major economic, financial, commercial, scientific and technological centers in the region.

Build this place into a smart, high quality living city, with two main contents:

The first is the need to study and timely apply the model of urban government to match the characteristics of the current city.

Second, the central proposal for decentralization, delegation to the city can address some important issues. Such as being active in arranging the internal administration, the position of administrative staff, payroll, wage fund, salary policy to attract talents, …

In addition, HCMC should also decide to select investors for projects with an area of 100 hectares or more. Or the project has more than 2,500 apartments or more and investment projects below VND10,000 billion (currently under the authority of the Government). The city should also have the authority to decide on the selection of contractors for projects using land pursuant to Article 26 of the Bidding Law to organize, evaluate basic designs, appraise technical designs of high-rise buildings, etc.

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