An average, basic two-bedroom flat in HCMC and Hanoi costs VND2 billion ($86,300), 28 times higher than the average annual salary of fresh graduates.
Vietnam rolled out an affordable housing program, but when its billion dollar allocation ran out, many projects stalled.
Suspended ventures due to lack of administrative procedures are instigating a severe shortage of supply and sharp increase of prices of the property market in Ho Chi Minh City, as well as in outskirt areas.
Ho Chi Minh City has seen no new supply of affordable housing in the third quarter because of low profit margin.
Four years ago, the State Bank of Vietnam (SBV)’s preferential loan credit package of 30 trillion VND (1.29 billion USD) helped thousands of low-income people purchase low-cost apartments in big cities.
Hoang Thi Thuy Van, 48, of HCM City’s Thu Duc District, was able to buy a low-priced apartment four years ago because of a preferential credit package, but many people still cannot afford to buy a home.
Home prices are now beyond the reach of Vietnamese medium- and low-income earners, but the low-cost housing segment has been gradually disappearing from the real estate market.
Deputy Prime Minister Trinh Dinh Dung has ordered the construction sector to make significant breakthroughs in the development of the affordable housing segment as its supply is increasingly scarce, while the demand for such housing is on the rise.
By the end of the third quarter 2018, the market recorded housing products that meet actual needs to have the best consumption rate. On the other hand, despite many sales tactics, luxury apartments still under-performed. This is because an ideal home is now vastly different when focus is placed on reasonable price, multi-purpose spaces and the surrounding utilities.