Affordable housing segment forecasted to dominate real estate market in 2018

By Quynh Nhu - Jan 08, 2018 | 12:03 AM GMT+7

TheLEADERThe Ho Chi Minh City Real Estate Association (HoREA) forecasted that in 2018, the demand for housing worth under VND1.5 billion (roughly US$66,181) would continue to increase.

Affordable housing segment forecasted to dominate real estate market in 2018
Demand for under VND1.5 billion housing units would grow strongly.

This is predictable as in 2017, the demand for this segment is also largest in the market and there was no sign of declining at the end of the year.

HoREA forecasted that the real estate market in 2018 will continue its positive growth and is likely to remain the stable development as in 2017. Particularly, the affordable housing segment with one to two bedroom apartments worth around VND1 billion (roughly US$4412) per unit is still the mainstream segment which has the highest liquidity of the real estate market.

Social housing segment is expected to grow stronger and high-end residential segment would experience a strong restructuring to match the consumer purchasing power in the market.

Condotel and subdivided land segments will continue to grow strongly, sparking the increasingly fierce and complex disputes, which needs to be controlled and addressed effectively and timely.

In order to meet the demand and reduce losses, many real estate investors may have to reduce the price of high-end apartments or focus on developing low-end commercial housing.

In addition, experts said that foreign investment in the real estate sector will increase up to about US$3 billion a year over the next five years. By 2017, foreign investment in real estate was estimated at US$2.5 billion.

According to statistics by the Ministry of Construction, since the Housing Law was passed in 2014, nearly 2,000 foreigners have been issued certificates of land use rights and ownership of houses and land-attached asset in Vietnam.

HoREA also forecasted that the trend of cooperation among enterprises would be inevitable. Merger and acquisition (M&A) activities would grow stronger partly thanks to the effective implementation of the National Assembly Resolution on bad debt elimination.

Foreign capital inflows and remittances continue to be important sources of investment in the real estate market in particular and the economy at large in the coming time.