HCMC housing prices to rise as supply remains low: realtor

By Dinh Tri   May 15, 2024 | 12:07 am PT
HCMC housing prices to rise as supply remains low: realtor
A social housing project in HCMC's Binh Tan District. Photo by VnExpress/Quynh Tran
A lack of supply might drive up housing prices this year, according to Le Hoang Chau, chairman of the HCMC Real Estate Association.

Last quarter the city only saw one apartment project with 200 units and one new commercial housing project with an area of 3,600 square meters being licensed to be built, he said at a seminar Tuesday.

No townhouse project has been approved for sale so far this year, he said.

In the case of social housing, only 250 units in existing projects were added to the market and no new project was licensed last quarter, he said.

Seven social housing projects are still under construction and are expected to have 5,000 new units once completed.

Due to the low supply, housing prices are likely to remain high and even rise further this year, Chau said.

If amendments made to the Land Law are implemented this year, supply might improve, he said.

The new regulations allow commercial housing to be built on a mix of residential and other types of lands, he explained.

Now commercial housing can only be built on residential land.

Since mid-2015 around 126 housing projects have been refused licenses for failure to use the right type of land, with 15% proposed to be built on non-residential land and 85% on a mix of residential and other lands.

Thus, when the amendments take effect, the latter is likely to be licensed, Chau said.

However, it may not be enough to satisfy the high housing demand, he noted.

Chau proposed expanding the categories of land that could be used for commercial housing to increase supply.

Also at the seminar, Assoc. Prof. Dr. Phung Quoc Hien, a former deputy chairman of the National Assembly, said land usage and management in HCMC have not been effective.

The city lacks land for social housing, transportation, healthcare, education, and high-tech industries, but there are no mechanisms to boost supply.

But land prices are high, he said.

"If land prices continue to rise, it will impact production costs and product prices, making investment in the city less appealing."

Prof. Dr. Ta Ngoc Tan, standing vice chairman of the Central Theoretical Council, agreed, saying the city real estate market has been developing unsustainably.

The city should improve land administration by adopting digitization and ensuring market transparency, and conduct frequent inspections to prevent wastage of land, he said.

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