The real estate market is increasingly scarce with affordable products

According to the General Statistics Office, the population size of Ho Chi Minh City has now reached nearly 13 million people. In particular, the immigrant population is nearly 3 million, accounting for about 23% of the population, about 400,000 students and more than 50,000 new married couples each year. Thus, in the next 10 years, the demand for affordable housing in the city may reach about 1 million units.

However, the supply of low-cost commercial apartments, social housing and cheap rental apartments in accordance with the financial capacity of the majority of people in the city is very lacking. This situation has potential to affect the stability of social security.

Chairman of Vietnam Real Estate Broker Nguyen Manh Ha said that the demand is large while supply is scarce, causing the market to show signs of instability. Mr. Ha also added that real estate supply declined sharply in the first quarter of 2019, especially in the two big cities of Hanoi and Ho Chi Minh City. In the first quarter of 2019, Ho Chi Minh City only witnessed 3,000 products launched into the market, very little compared to the number of more than 50,000 products of previous years.

This fact may have potential instabilities for the market such as strong price increases, speculation, pushing prices up, causing the market to suffer.

At the same time, Mr. Ha also affirmed: “In the coming time, 2 big cities continue to face difficulties in supply. The real estate market for new supply needs to wait a while longer. ” But when asked about the specific time for the new supply to return to stability, Mr. Ha did not give an accurate answer, because the market supply depends on many different factors.

And Mr. Ngo Quang Phuc, General Director of Phu Dong Group said that the scarce supply in Ho Chi Minh City market now mainly falls into products for people with real needs. Once the supply is scarce, the choice of home buyers will be less. According to market principles, supply is low - demand is high, prices will rise.

Mr. Phuc analyzed: “In recent years, the market lacks affordable products at the price of 1-3 billion dong / unit, with the current situation, this segment will continue to be scarce. That means, real buyers will be increasingly difficult to own real estate. It is unstable for the market because the ultimate goal of real estate is to solve the settlement problem for the people ”.

The scarcity of goods for sale will also be detrimental to the business, which is to disrupt the business, while, it still costs money to feed the employees. This is really difficult for small businesses.

Find solutions to supply scarcity

Experts and real estate companies all said that only when there is a balance of supply and demand, can the new market be stable and the price will be reasonable.

According to Nguyen Manh Ha, any market that wants to develop stably needs to ensure balance in supply and demand.

In the same view, Mr. Ngo Quang Phuc emphasized: "The nature of the market is supply - demand must be similar to each other to create a reasonable price. When supply is more, demand is stable, real estate prices will tend to be stable. For example, even if the price falls, it is beneficial for consumers, for example, there are 1,000 needs, but up to 100 businesses bring products to the market, it is clear that they have to compete with each other, not to sell price up. "

Mr. Ha added that industry agencies have also realized the situation of scarcity of supply in the real estate market and there are timely adjustments to avoid instability for the market.

The difficulty in legal procedures that Mr. Phuc said is the main reason leading to the reduction of new supply in the market today. But once the supply fails to keep up with the demand, the market will be hard to stabilize. That is not to mention the potential of local fever in some places, something the city government did not want.

From this situation, Mr. Phuc has "made a plan" on solutions to stabilize the supply of real estate market as follows:

First, when making a policy of limiting / increasing supply to avoid massive development, the state needs to state in detail what restrictions / increases for which type, for which needs (in fact invest). At the same time, it is necessary to rely on the real demand of the market to make appropriate increase / decrease.

Mr. Phuc emphasized: “The nature of increasing supply is to provide the right product for real needs, not for investment or speculation. Already an essential commodity, it must be true, in accordance with the affordability of the masses. But the real demand mainly falls into the category of 1-3 billion dong, then this segment itself must have a stable supply. If all the solutions are used to limit this supply, the market will surely be unstable. ”

Next, there must be a land fund to create a supply source. Land and legal procedures are the hardest of real estate businesses today. Once the enterprise has the finance, the idea of ​​design and construction, the state must have the land, support legal procedures, thus, hope to create new products for the market.

For example, instead of having businesses go to buy land from people, each place is a little, even, and even raise the selling price massively, authorities can focus on finding solutions to create land and legal funds. Clean up on 4 main axes of the city (East, West, South, North) for enterprises to participate in auctions and project implementation.

Once four large urban areas are created at the four axes of the city, that is creating population expansion and sharing less pressure on urbanization in the central core area. The land fund at the four city axes in fact is still very large, so why don't we study the methodical planning solutions at these four axes. For example, phase 1 will implement a 1,000ha plan at each location. The state can issue bonds to mobilize money, implement compensation and clearance by budgetary capital.

At this time, 4 axes will have 4,000ha of land, broken down so that businesses can participate, bid and auction land to build projects. Mr. Phuc added: "For example, in the overall planning, Lot A is 30 stories high, the number of 1,000 houses, the full population target, the enterprise is only responsible for designing, construction and granted licenses. full. It means that the state supports a large land bank and a transparent auction.

Enterprises with clean land will develop in the right direction, creating a large housing fund, ie a stable supply. When people have a large housing fund, people benefit, there are many choices. They worry about doing business, accumulating money to buy houses. Prices do not increase suddenly because of supply shortage, the market will be stable. "

Mr. Phuc further analyzed and developed the project development plan so that even people with an average income of 10-20 million VND / month could buy a house. For those who earn 20 million VND / month, they can completely buy houses for 500-600 million VND. Therefore, the market needs to have this kind of product for buyers to choose.

For those with an income of VND 100 million / month, the market needs to provide houses worth VND 10 billion for them to buy. For real estate businesses, it is necessary to ensure profits in the right margin. Only then, will the real estate market grow stably, long term and those who have real needs will have the opportunity to buy houses, reduce the gap between rich and poor in society.

(According to Young Intellectuals)