Apartment buildings in District 2, Ho Chi Minh City. Photo by VnExpress/Quynh Tran.
The housing market has an oversupply of mid- and high-priced units but a shortage in the affordable segment despite large demand.
Demand for houses and apartments in the former category, priced at VND25 million ($1,078) per square meter onwards, only accounts for 20-30 percent while the remaining 70-80 percent of the demand is for affordable housing, according to a recent government report.
The report, compiled by the Ministry of Construction for the National Assembly, said residential property prices are bloated, volatile and out of reach of most people.
The ministry blamed this on the lack of funding for social housing programs, pointing out there is no channel for mobilizing long-term investment for it.
The lack of funding recently caused the construction of 221 social housing projects around the country to be delayed or scrapped.
The report said so far 249 social housing projects with 104,200 units have been built and another 263 with 215,800 units are being developed.
The supply of affordable apartments costing around VND1 billion in major cities is dwindling. Most of the smallest apartments available, measuring 45-50 square meters, now cost VND1.5 billion, data compiled by VnExpress shows.
Less than 22 percent of new supply in HCMC between 2016 and the first half of 2020 was in the affordable segment, indicating the shortage, the Ho Chi Minh City Real Estate Association said in a recent report.