The real estate market in Ho Chi Minh City has shown signs of recovery since August. It is forecasted that in the coming time, the market will continue to recover and grow again.
According to the report on the 10-month real estate market by HoREA, from March to July 2020, the real estate market was hit hard by the Covid-19 pandemic, which exacerbated the difficulties that have existed in the real estate market in the last 3 years. The market suffered a decline in both the supply of projects and the supply of housing products, especially affordable apartments and social housing.
Although the supply of housing projects plummeted in the first 7 months of the year, there have been signs of improvement since August.
Data from the Department of Construction of Ho Chi Minh City
shows that in the first 9 months of 2020, many small-scale housing projects with 100% of legal residential land were approved by the Department of Construction. In particular, 11 projects were granted investment policies (an increase of 10 projects compared to the same period in 2019), 9 projects were approved (an increase of 9 projects compared to the same period in 2019), and 24 projects were approved investment (up 12 projects, compared to the same period in 2019).
In the first nine months of 2020, only 20 housing projects were eligible to raise capital (a decrease of 37.5% compared to the same period in 2019). In particular, there were only 163 affordable apartments, accounting for 2.5%; 1,863 middle-class apartments, accounting for 25%; and 4,876 high-end apartments, accounting for 72.5%.
The structure of housing products clearly shows the supply-demand mismatch in the market. There is unbalanced and unsustainable development due to the lack of affordable housing, affordable housing and social housing, and oversupply of high-end housing.
At the end of October 2020, the Department of Construction announced that there were 10 housing projects with 9,147 units, including 8,317 apartments and 830 low-rise houses eligible to raise capital to sell houses in the future.
Despite being affected by the pandemic, house selling prices in the primary market are still very high. House prices only fall on the secondary market (mostly due to resale and sales to cut losses) and the rental real estate market.
According to HoREA's forecast, in the near future, the real estate market will continue to recover and grow again thanks to the fact that the Covid-19 is under good control, and a number of new policies in the Investment Law, Construction, Housing Law and Real Estate Business Law.
At the same time, the Government is considering amending a number of decrees, especially the draft Decree amending the decrees implementing the Land Law, which will remove many problems regarding mechanisms and policies.
In Ho Chi Minh City alone, the real estate market can recover and grow faster when the plans to convert 4 out of 5 townships into districts in the next 10 years. In particular, it is possible that Can Gio district will become a coastal urban area in the future.
In addition, the Government has decided to allow Ho Chi Minh City to convert 26,000 hectares of agricultural land into industrial, commercial, service, urban and housing land in the 2016-2020 period.