HCM City real estate: more high-end property, but fewer affordable products
HCM City authorities have reported to the Ministry of Construction (MOC) about the implementation of housing policies and the real estate market in 2021.
The city’s real estate market did not see big changes in number of houses because of the big impact from the Covid-19 pandemic and the lockdown. The housing supply was modest.
There were still many problems in the legal framework which cost enterprises time to prepare documents for project development.
Meanwhile, many projects in HCM City were under inspection, examination, auditing, review of legal procedures, and even investigation. This led to the slow coordination among relevant departments in handling legal procedures of projects.
HCM City reported that total revenue of real estate business in 2021 decreased by 25.2 percent compared with the year before, while the number of newly registered real estate firms fell by 17 percent.
HCM City’s Mayor Phan Van Mai said the statistics truly reflect the real situation of the city’s real estate market. This was the second consecutive year for a decline in real estate business.
However, the good news is that newly registered foreign investment reached $214.1 million, an increase of 67 percent over 2020. However, the figure was still 53.3 percent lower than 2019.
In 2021, HCM City developed 4.7 million square meters of housing floor area, and relocated six apartment buildings with 333 households, while the relocation of five apartment buildings remained uncompleted. Four degraded apartment buildings were dismantled. Investors were found for 10 apartment projects, while five projects still could not find investors.
In 2021-2025, HCM City plans to develop 47 social housing projects. Of these, 37 projects will use land that developers pay compensation for site clearance and 10 projects will use 20 percent of the land at commercial housing projects.
The HCM City People’s Committee commented that there was an unbalanced product structure with the proportion of affordable products decreasing from 1 percent to zero percent, mid-end apartments (with selling prices of VND20-40 million per square meter) dropping from 56.9 percent to 26.02 percent and high-end apartments (over VND40 million per square meter) increasing from 42.1 percent to 73.98 percent.
HCM City plans to increase the housing floor area by at least 6.7 million square meters this year, obtain housing area per capita of 21.2 square meters at minimum, and reserve 194.6 hectares of land for commercial housing development and 52.1 hectares of land for social housing projects.