The affordable home segment has made up the largest proportion of the housing market this year, according to a report of the HCMC Real Estate Association.

Residential blocks under construction in HCMC. The affordable home segment has made up the largest proportion of the housing market this year 

The association cited the HCMC Construction Department as saying that social homes account for 68.7% of all units put up for sale in January-June.

The department has approved 32 housing projects with 16,506 units to mobilize VND30.59 trillion from homebuyers. The high-end segment has 5,164 units, accounting for 31.3% of the total.

Besides, there are 5,136 medium-end condo units (31.1%), and 6,206 low-cost units (37.6%). As such, affordable homes make up the largest proportion, 68.7%.

The association said this is a positive sign as investors have restructured their product portfolios to meet the demand for small and medium-sized apartments of middle and low income urbanites.

However, the number of mid-end apartments on sale has declined by a staggering 42.1% compared to the same period last year. As a result, large investors specializing in the segment have not sold any products so far.

The number of newly-established enterprises in the real estate sector has increased sharply, representing one-third of the total.

The report also said growth in capital mobilization had risen by 6.5% in the first half of the year, up from 5% in the year-earlier period, with an average interest rate of 4.8% for social housing units.

However, the central bank’s Circular 06/2016/TT-NHNN raises the risk weight of loans for the real estate sector to 200% and tightens credit for the sector within two years, thus forcing property developers to look for other sources of capital.

Social housing supply remains short despite strong demand, according to the association’s chairman Le Hoang Chau.

SGT