HCM City housing prices rise on shortage of new supply

HCM City suffers from a housing shortage caused by a rapidly rising population and shortage of new projects. - VNS Photo Van Chau

It has become very difficult to find apartments for less than VND 2 billion (US$ 85,500) in the city.

Prices are up 5-10 per cent compared to just six months ago.

At one apartment project in District 1, an 85sq.m unit with two bedrooms costs VND 21 billion (nearly $900,000). Apartments measuring 140-180sq.m sell at VND47.7-50 billion.

A bit further from the city centre, in Thu Duc District, near the Ha Noi Highway, apartments in the Tan Hai Minh project was selling at VND35-40 million last year, but now cost VND50-60 million per square meter.

Le Hoang Chau, chairman of the HCM City Real Estate Association (HoREA), said housing prices continue increase because of a lack of new projects and demand far outstripping supply.

Administrative procedures take too much time while transportation between the central and suburban areas is not good, meaning people do not want to stay outside the main areas, he said.

With the Government likely to take time to simplify the administrative procedures, developers could now price their projects at whatever level they want, he added.

The rapidly rising population is also a reason for the soaring housing prices.

HoREA pointed out the city’s population increases by one million every five years. The Department of Construction has said 476,000 families lack housing while 21,000 others living along canals and 35,000 living in dilapidated apartments need to relocate.

To resolve the shortage, HoREA has called on authorities to build more housing at reasonable prices for low-income people and simplify administrative procedures for social housing projects, Chau said.

Le Huu Nghia, director of Le Thanh Real Estate Company, said his company submitted a proposal for a social housing project in Binh Chanh District in March, but has not heard back from the Department of Planning and Investment though the project area is earmarked for social housing.

“We recommend that the Government should speed up and simplify administrative procedures and draft new policies to encourage investment in social housing.”

Tran Khanh Quang, general director of Viet An real estate Company, said the Government should also create support policies for first-time buyers of housing. This would also preclude the purchase of social housing as an investment, he added.

Chau said HoREA has called for upgrading traffic infrastructure to link the five suburban districts of Cu Chi, Can Gio, Binh Chanh, Hoc Mon, and Nha Be with the city’s central areas so that they become more attractive as residential areas.