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$44,000 apartments poise for further gain in 2022

By Vu Le   February 6, 2022 | 01:54 am PT
$44,000 apartments poise for further gain in 2022
Low-cost apartment complexes in southern Binh Duong Province. Photo by VnExpress/Quynh Tran
Multiple real estate developers aim to build apartments worth VND1 billion (over $44,150) per unit this year, raising hopes of cooling the thirst for affordable housing.

Real estate developer Hung Thinh Corp, construction material manufacturer Dong Tam Group and wood company Truong Thanh Furniture Corp announced they would kick start their affordable housing initiative in Q1 this year to target the rising demand for affordable housing.

The joint effort includes construction, project developing, providing materials and household furniture for the low-cost housing market to serve low-income earners.

Hung Thinh Corp will be in charge of project development while the other two provide materials at a reasonable cost.

They announced prices would be around VND25 million per square meter in Ho Chi Minh City and below VND20 million in neighboring provinces Long An, Dong Nai and Binh Duong.

The price for each apartment will be around VND1 billion.

Not only has a coalition of businesses embarked on implementing affordable housing projects, but HCMC People's Committee also plans to increase the supply of low-cost houses this year in parallel with the goal of economic recovery after the pandemic.

In this year's economic recovery plan of the southern hub, there are 11 key points, including an initiative to build houses for low-income workers.

The city is working on a program to develop one million affordable houses with prices as low as possible, to make it easier for workers to access, or move out of old apartments and houses along canals.

Real estate developer Nam Long Investment Corp will cooperate with Nishi Nippon Railroad Company of Japan to carry out an affordable housing initiative titled EHome Southgate in Long An.

The price for each square meter is expected to be around VND18 million, equivalent to about VND1 billion per apartment.

This project was announced by Nam Long in Q3 of 2021, promising to stir up the affordable housing segment in 2022.

Nguyen Xuan Quang, chairman of Nam Long, once affirmed that affordable housing has always been the company's key mission and that it would continue to develop this segment for the next 10-20 years at least.

According to the company's data, many customers are still lining up to buy affordable houses at their project launch events, making it a potential source of demand amid limited supply.

The concept of affordable housing once shared by Nam Long with VnExpress is the housing segment where the total asset value is paid for by the accumulated income of seven years or more of a household.

The feature of affordable housing is to attract real housing demand. This is also a segment that stands firm in all circumstances, even when the real estate market is in crisis. House prices in this segment have the advantage of being affordable to the majority of people, so the number of reservations is always at a good level.

In addition, some other emerging businesses are also having many apartments constructed and put on sale in 2022 with prices of around VND1 billion per apartment in Binh Duong Province.

Phan Cong Chanh, CEO of property developer Phu Vinh Group, said the affordable housing market in the suburbs of HCMC or neighboring provinces is promising this year because of large demand.

The return of this segment, according to Chanh, will be the focus in attracting customer attention.

This is a product line that meets true demand, involving buying to live and not fore resale, with a shortage of supply in recent years, causing the thirst to peak in 2021.

According to Chanh's analysis, the difference between the low-cost apartment segment and the rest of the market is the large demand for accommodation, high affordability, and good liquidity (easy of trade).

If the demand for affordable housing is rapidly improved, it can contribute to reducing the pressure of supply-demand mismatch (shortage of low-priced houses, excess of high-priced houses) in the southern provinces this year, helping the real estate market develop in a balanced, equitable, and sustainable manner.

Vietnam's average income per capita in 2021 was VND68.4 million ($3,020), according to the General Statistics Office.

 
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