The realty market will continue facing many insoluble difficulties plus tightening credit policies for luxury home purchases will prevent small investors from borrowing directing market demand more to the affordable segment in 2020.
Property expert Tran Khanh Quang said that obstacles raised by developers for years have not been removed. Consequently, old housing projects and new projects are stagnant. Therefore, there will be a sharp fall in demand for luxury houses worth VND5 billion. Developers of luxury condo will withdraw because of shortage of capital as banks have tightened lending.
Chairman of DKRA Property Company Pham Lam pointed out that developers have duped investors into paying reservation fees causing distrust amongst investors. Worse, lately, investors worried at the news of an investor committing suicide after he lost VND3 billion to buy a land lot in the southern province of Ba Ria-Vung Tau.
As per the Department of Construction’s study, many younger generations don’t have their own houses or still live in their parents’ home accounting for 23.46 percent of the city’s population. Around 20,000 state-run employees have to live in rental houses.
Also the study showed that 300,000 people want to rent social houses and 143,000 people want to buy social houses.
In reality, around 21,000 households are located in canal and river banks while 35,000 others live in old condominiums that need to be renovated or torn down.
Homebuyers with low income in HCMC include employees in state-run companies, laborers, and immigrants (comprising of 274,622 migrant workers in 17 industrial and export processing zones)
Yearly, around 50,000 newly-wed couples and 500,000 students move to live in the city; all of them want to rent or buy affordable houses at the cost of around VND1 billion by 15 year installment.
However, according to reporters’ survey, there are too few affordable housing projects, each apartment priced under VND2 billion for low income groups. In the section 6B of the city’s large South part, only Terra Mia project each an apartment worth around VND2 billion under construction has completed legal procedure.
Whereas, credit policies to help low -and-moderate- income homebuyers in urban areas especially first-time homebuyers are not full except for the government’s resolution 02 with the credit package of VND30 trillion for the period 2013-2016 to assist 56,240 people with low-income to buy commercial and social houses under VND1.05 billion.
Housing policies as per the housing law 2014 has just supported VND1 trillion for buyers to rent or buy a house in 15 year installment.
HCMC is implementing housing policies for employees in state-run companies each entitled to borrow VND900 million with interest rate of 4.7 percent yearly in 15 years; around VND1,500 billion has been disbursed for more than 4,000 people mostly working in education and health sectors.