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Shortage Of Affordable Housing Supply: Will House Prices Rise?

Invite you and Vietnam real estate to find out the causes and effects of a shortage of affordable housing for home buyers through the article below.

Lack of supply of popular apartments

First of all, talking about the reason for the shortage of affordable housing is that investors are now focusing on the high-end apartment segment. The impressive sales of the luxury apartment market in 2015 and the first half of 2016 have created incentives for investors to continue building large projects for this market segment. So far, as people’s demand has shifted towards lower-end apartments and narrows in the high-end segment, the products of old projects continue to multiply and account for  44% of the real estate market. Meanwhile, mid-range, low-cost apartments are in short supply, not meeting the needs of home buyers.

Shortage of affordable housing supply
Apartment is increasingly scarce

Forecasts of rising prices of affordable apartments

The paradox that is happening in the market today also entails the great impact on people who want to own a popular apartment, which is the risk of increasing prices in the coming years of this type of apartment. Although that price does not match the quality of the product. It will be difficult for ordinary customers because the money to buy a house, although a little bit up, will make their lives more difficult. In addition, the emergence of more and more secondary investors, who want to buy cheap, low-priced apartments for sale or rent to make a profit in the current scarcity of apartments, puts more pressure on people when buying a house.

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According to experts in the real estate market, over the next three years (2016 – 2018), the price of ordinary apartments will increase by 10% per year, equivalent to 30% increase in 3 years. That is a very high price increase and people hard to meet.

Shortage of affordable housing supply
Home buyers are not worried about rising home prices

Homebuyer worries

In recent years, the number of wealthy people has increased significantly, but it can not be balanced by the number of middle-income and low-income people. Vietnamese people still have not been able to consume high-end apartment products. Meanwhile, a lot of people want to find a place to live in the popular projects, with pocket money to wait and face the risk of no home because the number is not enough. Those who can afford a home are also in a difficult situation because of price increases. Although their annual income increase is not enough to balance the rapid increase of the real estate market.

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Shortage Of Affordable Housing Supply: Will House Prices Rise?
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