High-end apartments dominate housing market

Apartments have accounted for 70% of housing supply this year, the association said in a recent report, 70% of them are high-end, indicating a lack of diversity, it said.

Mid-priced units costing VND25-50 million per square meter are now concentrated on the outskirts of major cities or their neighboring provinces like Bac Giang, Binh Duong and Dong Nai.

Property consultancy CBRE said over 75% of apartments in Hanoi that entered the market in the third quarter were priced at above VND60 million, with one notable luxury project in Tay Ho District listed at nearly VND200 million.

Savills, another real estate consultancy, said in HCMC, high-end apartments made up 60% of new supply.

Nguyen Van Dinh, the realty association’s president, said the premium products on the market are mostly meant for wealthy investors, and low-priced ones that should be the most common are increasingly scarce with no new projects in sight.

Development of social housing, which benefits workers and other low-income people, is tardy, he said.

According to the Ministry of Construction, as of mid-July the country had only achieved 36% of its target of one million social housing units by 2025.

An aerial view of Hanoi's Ba Dinh District. Photo by VnExpress/Ngoc Diem

With affordable apartments growing increasingly rare, Dinh said owning a home has become more difficult than ever for many people.

This is because most new projects are built to meet high standards and costs are rising, prompting developers to position their products as high-end to earn profits, he explained.

Apartment supply is forecast to increase in the short term, but the high-end segment is expected to predominate with the share of affordable housing shrinking further.

CBRE predicted that Hanoi will see 10,000 units launched in the last quarter, bringing its new supply for the year to 30,000, the highest figure in the last five years.

Dinh said authorities need to find ways to boost affordable and social housing and developers should focus on products that match the finances of the majority of the population.