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The real estate market only lacks houses... cheap prices

That is the opinion of Mr. Hoang Hai - Director of the Department of Housing and Real Estate Market Management, Ministry of Construction - at the "Real Estate Market Sustainable Development Forum" on September 22.

Mr. Hai said that the real estate sector has faced many difficulties recently due to the gap between policies, development orientations, and the actual market. This cannot be resolved in the fastest way

According to Mr. Hai, there is currently no shortage of housing in the real estate market, but there is a lack of supply of low-cost housing and social housing. The gap between supply and demand leads to a sharp decrease in purchasing power, which also increases difficulties. Specifically, the decrease in supply caused the prices of real estate, houses, and land to start increasing since the beginning of 2021. By the end of the year, apartments had increased on average by about 5-7%; individual housing in the project increased by 15-20%; land increased by 20-30% compared to the end of 2020.

"Apartments are constantly setting new prices due to the decrease in the number of apartments on the market. Affordable apartments are currently priced at 25-30 million VND/m2, mid-range apartments are priced at 30-50 million VND/m2, and luxury apartments priced at over 50 million VND/m2 have begun to exceed people's ability," Mr. Hai said.

Through working with localities and businesses, Mr. Hai assessed that there are currently many housing projects and urban areas that are facing difficulties, problems, or stopping due to land laws.

According to Mr. Hoang Hai, recently the Prime Minister has taken many actions to remove difficulties in the real estate sector. Typically, the Government issued Resolution No. 33 (March 11, 2023) on a number of solutions to help the market develop safely, healthily, and sustainably...

However, in the coming time, ministries, departments and localities still need to focus on reviewing and removing procedural problems. It includes investment preparation procedures and investor selection for real estate projects, commercial housing projects, and social housing according to regulations. In addition, agencies focus on removing difficulties and promoting real estate market development for both sellers and buyers...

According to Dr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association, the real estate market is facing a scarcity of social housing and low-cost commercial housing supply. Behind that is the lack of determination of many localities, making it difficult for the project to be implemented.

Mr. Dinh said that the efforts of the Government and relevant ministries and branches in removing difficulties for the real estate market recently have had a positive impact. In the first quarter, there were nearly 3,000 trading products and in the second quarter, this number increased by 30%.

“Investors' confidence has gradually been restored. However, the improvement of new housing supply and the stability of buyers' psychology is still happening slowly and needs more time," Mr. Dinh said.

Dr. Nguyen Van Dinh expects that in the period of late 2023 and early 2024, the real estate market will record more positive signs.

Dr. Le Xuan Nghia - a member of the National Financial and Monetary Policy Advisory Council - commented that the real estate market may have difficulties lasting until the second and third quarters of next year. According to Dr. Nghia, current solutions to overcome difficulties in real estate have not yet hit the "eye of the storm", which is to push up the supply of low-cost housing.

“To promote cheap supply, a mechanism must be built for businesses to actively participate. If we cannot create housing prices, we cannot solve the market crisis," Dr. Le Xuan Nghia emphasized.
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Ngoc Ma