Buildings in District 2, Ho Chi Minh City. Photo by VnExpress/Quynh Tran.
The number of new housing units entering the HCMC market dropped by nearly half between 2017 and 2019 as the city tightened permit issuance.
A report by the Ho Chi Minh City Real Estate Association (HoREA) says 23,046 housing units entered the market last year, down 18.6 percent from 2018. This was a drop of 46.4 percent compared to 2017, it said.
In the first six months of this year, 4,569 new units were introduced to the market, down 79 percent over the same period in 2017, making it likely that 2020 will be the third consecutive year that new supply falls.
Obstacles in acquiring permits has been the main roadblock for real estate developers. From 106 housing projects approved in 2016, the figure fell to 16 last year and 12 in the first six months of this year.
There is a lack of transparency in the approval of projects, HoREA said. Meanwhile, hundreds of projects have been struggling to acquire permits, it added.
The report also said that only 21.81 percent of new supply between 2016 and H1 2020 was in the affordable segment, showing a shortage of this type of property in the market.
In the last three years, average- and low-income people and rural-urban migrants have been most affected by the shortage of affordable housing. Many workers live in small and low quality rented houses which lack security and proper services.
Data from the Construction Ministry shows that between 2015 and 2020, social housing projects met only 41.4 percent of target with 248 projects contributing just 100,000 apartments.
The report also said that the Covid-19 pandemic has had major impacts on the real estate industry. There was no merger and acquisition deal involving a housing project recorded in the first six months of this year in HCMC.
Nationwide, 923 real estate companies either were dissolved or suspended their business in the first eight months this year, up 136 percent year-on-year, the highest among all sectors.