The HCM City Department of Construction (DOC) has released a report about the supply of real estate projects and housing products in the city in the last 11 months, which showed that high-end housing dominated the entire market.

Regarding the licensing of new projects, 12 housing projects received approval for their investment policy and investors in the last 11 months. Only one was a social housing project.

Of the 12 projects, six got approval from the Thu Duc City People’s Committee under the decentralization policy.

Regarding land allocation and leasing, since the beginning of the year, HCM City did not have any commercial and social housing project covered by this procedure. Only two commercial housing projects received licenses for construction.

In the last 11 months, four commercial housing projects in HCM City met requirements to be put up for sale with a total of 1.611 houses available, and all belong to high-end real estate market segment. 

The total capital needed to be mobilized to implement the 1,611 housing projects was VND15.142 trillion, or VND9.39 billion each. So, the number of houses meeting requirements for sale in HCM City decreased by 90 percent compared with the same period last year.

Meanwhile, 31 commercial housing projects were under execution with 31,167 products.

Commenting about the city’s real estate market in the last 11 months, Chair of the HCMC Real Estate Association (Horea) Le Hoang Chau said the 12 projects (which received approval for investment) is a very modest figure, just equal to one-fifth of projects approved in the years before Covid-19.

Chau said it is a problem that no housing project received allocated or leased land, and only two commercial housing projects received licenses for construction. This will lead to the absence of new supply in the market.

Commenting about the average price of VND9.39 billion, Chau said this was the first time high-end products dominated the entire real estate market.

“There is no new affordable and mid-end commercial housing product. The product structure in the market has become unreasonable, which cannot satisfy housing demand from low and mid-income earners,” he said. “The market is unsustainable and unhealthy."

In fact, the unreasonable product structure in HCM City has existed for many years. In 2020, high-end products accounted for 70 percent, while in 2022-2023, the figures were 72, 78.3 and 68.55 percent.

Also according to Chau, apartment prices increased by 15-20 percent in 2015-2023.

Anh Phuong