Few incentives for developers to build low-cost
The supply of affordable apartments in Vietnam is not keeping abreast of high demand from low-income earners, lamented market observers via Vietnam Plus.
The Grade C apartment segment, referring to apartments priced under USD1,000 per square metre, has registered a sharp decline in supply since mid-2017, according to joint-stock property company DKRA Vietnam.
Grade A and B apartments, on the other hand, have been more “plentiful”, in comparison. These units fall in the pricing range of USD1,100 to USD3,000 per sqm.
Affordable apartments comprise the smallest proportion of available supply, compared with the mid-range and high-end segments, also noted Le Hoang Chau, chairperson of the HCM City Real Estate Association (HoREA).
“It’s very likely that affordable housing will not even exist in the near future unless the government takes action,” he warned.
Apartments of less than 60 square metres with prices of less than VND700 million (USD30,090) comprise only five percent of market supply, according to official figures.
Vietnamese developers are finding fewer incentives to develop lower-cost housing, exacerbated by tightened access to credit, complicated bureaucratic procedures, and shortage of available land.
If building material prices or bank interest rates increase, the company’s bottomline could suffer, noted Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company.
“Investing in low-cost housing has low profits, only about VND1-2 million per square metre,” he said.
Vietnam should formulate preferential policies in land, tax, interest rates, credit and mortgages that will benefit developers of affordable homes, experts said. The government should also encourage more variety in the sizes of apartments to be developed.
“The demand for affordable housing is huge in HCM City, and regulations on low-cost housing should be issued,” said Chau.
PropertyGuru Thailand Property Awards continues long CSR history with Right To Play and the Mini Heart Project
The event’s official charity partner aims to foster Thailand’s young talents and will organise a joint CSR initiative at the end of 2019
7th PropertyGuru Philippines Property Awards reveals strong and varied shortlist for 2019 edition
Solid representation from urban and and regional real estate companies
Vietnam’s most vibrant architecture practices
The country's architecture scene is steadily catching up to Asian powerhouses—and the world is watching
Cambodia’s farewell to Everything But Arms
With the impending loss of EU tariff benefits, the growing economy may find itself derailed, with implications for the property sector