According to most industry experts, affordable homes will be the real estate segment to enter the first recovery rhythm in 2024. Developers are also accepting changes to adapt, as evidenced by a series of new projects that are starting to launch into the market from early 2024.
The Ministry of Construction proposes enterprises to prioritize building affordable housing
In the real estate forum recently organized by the Construction newspaper and the Ministry of Construction, Deputy Minister of Construction Nguyen Van Sinh wants real estate enterprises to actively implement a number of solutions such as diversifying capital sources, implementing solutions to save and reduce costs to reduce product costs, The product structure is according to the actual needs of the people, affordable.
Facing the situation of real estate inventory and irrationality in product structure, from the beginning of 2024, the Prime Minister has asked the Ministry of Construction to guide enterprises to restructure segments and lower product costs. There are appropriate, timely and effective solutions to restructure the segment for people with real needs, social housing, worker housing and low-income people. This move is a testament to the Government’s drastic efforts to remove difficulties for the real estate market to recover and develop safely and healthily and sustainably.
According to Deputy Minister of Construction Nguyen Van Sinh, in order for the real estate market to be better, real estate enterprises need to actively implement a number of solutions such as: Regarding investment capital, diversifying capital sources (in addition to bank credit, there is also the issuance of bonds, shares, investment funds, financial leases …); Mobilizing capital associated with specific capital use purposes; Reduce financial leverage, limit scattered investment. Regarding investment activities, focus on completing unfinished projects, especially social housing projects, worker housing, affordable housing to increase liquidity.
In investment activities, enterprises must ensure product quality when handing over to customers legally; quality assurance of design and function; adequate arrangement of social infrastructure; diversified and synchronous in utilities and services.
According to the Vietnam Real Estate Association, in order to remove instability related to inconsistencies in the housing structure due to the misalignment of supply and demand, localities need to develop housing development programs and plans in accordance with the National Housing Development Strategy in 2030-2045, There is a balance of supply and demand of segments. At the same time, it is necessary to study experiences of countries on how to mobilize other resources from society and have effective solutions to develop social housing, affordable commercial housing suitable to the affordability according to the market mechanism, strengthen support, etc certain incentives on land, tax and other preferential policies on social housing investment. Adequate allocation of land fund for construction of social housing in urban planning.
“The Ministry of Construction will continue to study and absorb in the process of building and perfecting the legal system and advise the Government and the Prime Minister in directing and administering to help the real estate market develop safely, healthily and sustainably in 2024. We believe in the Government’s policies, the determination of the whole political system with the policies that have been implemented, in 2024, the real estate market will recover and develop sustainably”, Deputy Minister Nguyen Van Sinh affirmed.
Real estate businesses proactively adapt
According to most industry experts, affordable homes will be the real estate segment to enter the first recovery rhythm in 2024. Demand in this segment remains very high. The Ministry of Construction’s policy to promote the development of affordable real estate also stems from this need.
In the context of gloomy liquidity, the shortage of affordable housing forces developers to change the rules of the game. In particular, enterprises actively implement a number of solutions such as product structure, profit regulation.
Records show that many investors have accepted changes to adapt to the market with a series of new affordable projects launched in late 2023 and early 2024. At the same time, developers who have so far oriented towards the affordable apartment segment have now focused on regulating profits, focusing on the interests of home buyers towards sustainable development with slow but sure moves. Typically, Phu Dong Group, the investor has implemented 3 affordable housing projects in Binh Duong province that are well received by many customers. Recently, despite many difficulties in the market, this unit still has enough potential to start construction of Phu Dong SkyOne project with full legality and is expected to have 780 affordable apartments launched in 2024, meeting the real needs of people.
In fact, at the end of 2023 and early 2024, the affordable apartment segment still has quite good transactions. Businesses specializing in this segment have continuously “kept heat” for the real estate market during the past time.
Sharing recently, Ms. Giang Huynh, Deputy Director, Research & S22M Department, Savills Ho Chi Minh City, said that in the context of the primary selling price of Ho Chi Minh City apartments in Q4/2023 at VND 69 million / m2, gloomy transactions caused many expensive projects to temporarily close shopping carts. Along with that, products under VND 2 billion in this area have completely disappeared from the market so far, neighboring areas such as Binh Duong, Dong Nai, Long An are the choice of buyers. According to Ms. Giang, by 2024, these localities are expected to account for 96% of the supply of affordable apartments. However, from now to 2026, the supply of apartments priced from VND 2-5 billion will continue to decrease markedly.
Also recently, a vice president of a real estate company cited that in mid-2023, a company offering 700 soft-priced apartments by the end of the year has sold 699 units. According to this position, the secret of sales only comes from 4 points: The first is to choose the right segment: affordable house prices of employees, prices above and below VND 1.5 billion are very good consumption. At the same time, investors must orient buyers to live, not buy for speculation. The second is legal clarity. The third is quality, making commercial housing at a soft price but fully utilized, the quality of handover is no different from mid- and high-end projects. The fourth is to keep the progress committed to the buyer.
According to Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers, developing affordable housing will open up opportunities to solve the misalignment of supply and demand, meeting the housing needs of the majority of people with middle and near-middle incomes, pulling down the housing price level of the entire market. If the whole market joins hands and housing policies follow the direction of a market economy, affordable housing will develop in parallel with social housing.
To accomplish this, Mr. Dinh said that the State needs to come up with an official definition of affordable housing; Research mechanisms and preferential policies specific to affordable housing with the main goal of encouraging investors to participate in the development of supply in this segment. In particular, there are preferential credit policies dedicated to increasing purchasing power, supporting investors in the development and operation of social infrastructure projects. In addition, increase investment and expand connected transport infrastructure. When distance is no longer an issue, the trend of moving from the central area to the edge of the city is inevitable.
