Primary housing supply in Ho Chi Minh City leads the country
According to market reports from the BHS Group Research and Development Department (BHS R&D), in the period of 2021-2022, the Vietnamese real estate market witnessed a severe decline in supply, mainly due to project financial and legal issues.
The real estate market has almost no liquidity, projects have stopped selling, even been revoked or are involved in lawsuits and disputes with customers... Legal bottlenecks make investors increasingly cautious when deciding to invest in real estate products.
Faced with the situation of market confidence being "eroded", from mid-2022 to the first half of 2023, the State has stepped up management by tightening credit and reorganizing legal barriers on land and housing.
After a year of efforts by the Government and real estate businesses, the real estate flow has gradually shown positive signs, with products returning to the market with a new, more attractive image, stricter legal regulations and more preferential policies, alleviating customers' concerns.
According to BHS R&D data, by the end of September 2023, there were 33 provinces and cities nationwide with real estate projects open for sale, providing the market with a total of more than 203,300 housing products, including low-rise and high-rise housing.
Pursuant to Article 55 of the 2014 Law on Real Estate Business, which stipulates the conditions for real estate formed in the future to be put into business, the number of primary housing products that are legally eligible for sale according to the law accounts for 87%, equivalent to nearly 178,000 units. Of which, apartment products account for more than 72%, equivalent to about 129,000 apartments, the remaining about 49,000 products are low-rise.
Reality shows that the rate of legal primary housing products has been increasing gradually in recent times, proving the effectiveness of the State's strict management through adjusting legal policies on land and housing.
According to BHS R&D data, the primary supply of legal housing is scattered across the three regions of the North - Central - South and is unevenly distributed, with 69% of products concentrated in the South, the North and Central regions accounting for 24% and 7% of the total primary supply of legal housing nationwide, respectively. Most of the projects were launched before 2023, currently continuing to maintain sales, very few new projects are opening for sale.
In the South, there are 88 housing projects for sale with full legal status, including 47 high-rise projects, providing 85,000 apartment products to customers; the remaining 41 projects are low-rise products, providing customers with nearly 38,000 choices.
The North has a primary housing supply with full legal status of approximately 1/3 of the South with 63 primary projects with full legal status, of which high-rise products still account for the majority with more than 36,000 high-rise products.
The Central region has the most modest supply of primary housing with legal status, with 32 projects offering nearly 12,000 products, mainly concentrated in Nghe An, Binh Dinh, Da Nang, and Khanh Hoa.
According to BHS R&D representative, the supply of primary housing with full legal status is divided by locality in detail: Ho Chi Minh City leads with nearly 68,000 legal products, accounting for 38% of the total legal supply nationwide, of which up to 97% are high-rise products.
Hanoi has more than 41,000 legal primary housing products, of which 91% are apartments. Next is Binh Duong, which supplies the market with more than 20,000 units, Dong Nai with nearly 12,000 units, Can Tho and Long An also have more than 5,000 legal products...
Economic centers such as Hanoi and Ho Chi Minh City, along with industrial cities and satellite towns with development potential, always attract a large number of workers to live and work; leading to an increasing demand for housing.
"To meet the large demand, the above localities focus on developing high-rise housing products with suitable prices, more accessible than low-rise products; therefore, these areas also lead in the supply of legal housing," said a representative of BHS R&D.
Housing prices are getting more and more expensive
During periods of “land fever”, customers were eager to buy real estate without thoroughly understanding the legal aspects. Currently, after nearly 2 years of market fluctuations, customers have become more cautious and difficult to decide on investment.
In addition, the State is continuing to amend the land law in a stricter direction; at the same time, it has decided to abolish the land price framework and build a new annual land price list from January 1, 2026.
When applying the new method of calculating land use fees, the cost of site clearance is also higher, making the initial investment for each project higher, which is expected to make housing prices more and more "expensive". (Photo: VNN)
BHS R&D representative, Mr. Hoang Huu Minh Dung commented: Future projects will need to meet more stringent conditions to meet legal standards for sale, investors will take more time to prepare for sale, the upcoming market is unlikely to have an explosion in supply.
At the same time, when applying the new method of calculating land use fees, the cost of site clearance is also greater, causing the input investment level for each project to become higher, expected to lead to increasingly "expensive" housing prices.
"In the coming time, the number of newly approved projects will be scarce, so projects with full legal documents opening for sale at this stage are considered an opportunity for customers who are interested in safety and looking for good prices when investing in real estate," said Mr. Dung.
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