In recent years, rapid urbanization has increased the urban population from 1 to 1.3 million people. At the same time, the labor market has also clearly shifted from the agricultural group to other industrial and service groups.
With the increasing urban population, the housing demand of workers and immigrants in big cities is also increasing. That is one of the reasons why the conditions for building small apartments have been relaxed.
Specifically, the minimum area for an apartment is 45 square meters, as stipulated in the Housing Law of 2005. However, after a period when the market was thirsty for affordable apartments, the minimum area for apartments was reduced to 25 square meters in 2020. However, the project must ensure that the proportion of apartments with an area of less than 45 square meters does not exceed 25% of the total number of apartments in the project.
Small apartments often appear in suburban projects.
The Ministry of Construction also determined that the demand for small-sized housing is real and has the effect of stimulating demand for the market. The construction of small-sized apartments should be carried out from the perspective of solving housing for people with real needs rather than creating housing for ownership.
Through the recent period of the real estate market, small-sized apartments have become more effective when they easily meet the housing needs of people, at a not-too-high price. A recent study on the psychology and behavior of home buyers by the Dat Xanh Services Institute of Economic - Financial - Real Estate Research (DXS-FERI) shows that home buyers are interested in and aim to reduce the amount of money they spend on buying an apartment to the lowest level. Up to 78% of buyers are interested in the total price of the apartment, while 22% are interested in the price per square meter of the apartment they intend to buy.
According to the real estate brokerage community, small apartments such as studios and 1-bedroom apartments are currently in high demand and are the segment that sells out the fastest in new apartment projects. In addition to maintaining a moderate price, these apartments are also easy to sell, rent and also meet the housing needs of a nuclear family.
Also from the customer trend, many investors have also started to reduce the apartment area in new projects, mainly concentrated in the suburban areas of large cities such as Hanoi and Ho Chi Minh City. Choosing the suburban areas as the place to develop is to have a large land fund, reduce costs and "target" the potential customer group of this type of small apartment.
Studio apartments still meet the housing needs of a small family.
Talking about this issue, Ms. Pham Thi Nguyen Thanh - General Director of DXS said that the current reduction in apartment area is concentrated in suburban urban projects, while in Ho Chi Minh City and Hanoi there are some differences.
Accordingly, each geographical region will have a variable rate of income of the people in that region. For suburban urban residents, buyers are interested in small apartments because the total price will be small. This comes from the fact that the unit price (per square meter) is increasing and there is no chance of further reduction, because the input costs of investors have increased too high, especially for newly opened projects.
As for areas that are likely to attract investors, such as Hanoi and Ho Chi Minh City, if there are products that suit their tastes, customers are still willing to spend money to buy large-area products. Normally, in the investor's price structure, the larger the apartment area, the lower the price per square meter, so buyers with enough financial potential and smart calculations are still willing to buy large-area apartments to be able to live in a spacious environment.
This expert also believes that the general income of the people is falling too low, so with new projects, investors are forced to adjust to suit the income of customers. The trend of reducing apartment area can last for at least the next 5 years, especially in suburban cities.
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