Vietnam Real Estate Association Chairman Nguyen Tran Nam said that the local property market would see more cheap housing supply in 2017 to meet increasing demand.

Nam cited some statistics from big real estate firms saying that in 2016, up to 80% of real estate supply in Vietnam were high-grade homes, much higher than real demand.   

Meanwhile, affordable housing supply was limited. To date, cheap housing projects have been able to provide a total area of 3 million square metres compared to the demand of 10 million square metres.

Vietnam’s population has reached 94 million people and the figure is expected to reach 100 million by 2020. Each year, around 1 million people come to urban areas to work or live, a move which is expected to offer a very good opportunity for the real estate market’s development, particularly the low-cost segment.

VinGroup recently announced a plan to develop 200,000 to 300,000 apartments priced between VND700 million (USD31,800) and VND1 billion (USD45,450), mostly in outlying areas of Hanoi and HCM City. Hoang Quang Real Estate Company has set a target to launch around 34,000 low-cost apartments in the southern region from now until 2019.

Experts suggested that businesses need more favourable conditions from the government to invest in affordable property projects, especially site clearance and infrastructure development. The government also should offer them more preferential loans.

According to Nam, the Vietnamese real estate market would be more transparent and open in 2017 as the government has further simplified administrative procedures and tightened policies on land planning.

Mergers and acquisitions in the local real estate market are forecasted to jump in 2017 as foreign investors look for local partners due to many factors the country’s the country’s fast-growing economy, accelerated urbanisation and expanding middle-class population with higher incomes.

For instance, a large number of Japanese property developers including Sumitomo, Sanyo Homes, Daiwa House, Aeon and Toshin have pledged to invest up to USD2 billion in the country.

Dtinews