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Demand for cheaper housing set to drive real estate market
The low-income houses sector is expected to boom this year, driving the recovery of the real estate market, experts have said.
Earlier this year, several housing projects for low- and medium-wage earners were initiated by investors who anticipate a buoyant year ahead.
Le Hoang Chau, Chairman of the HCM City Real Estate Association, said demand for low-income apartments costing less than VND15 million (US$810) per square metre was growing.
To meet demand, investors such as Viglacera Land Real Estate Company have rushed to launch projects. Viglacera plans to sell more than 200 low-income apartments in Ha Noi's Gia Lam District this year. The apartments will be 45.3sq.m, 60.5sq.m and 66.8 sq.m in area and cost between VND10.5 and VND11.5 million ($567-621) per square metre.
Representatives
Vinaconex JSC also plans a major housing project in Chuong My and Me Linh districts. Vinaconex representatives said in the first quarter the company planned to build more than 1,500 apartments for low-income families in central Da Nang City and another 1,500 apartments in Ha Dong District, Ha Noi, ranging in price from VND8 to VND9 million ($432-486) per square metre.
Le Thanh Than, Director of Lai Chau Construction No.1 Company, said that he anticipated demand for housing to soar this year, especially around the $1,000 per square metre mark.
Luong Tri Thin, General Director of Dat Xanh (Green Land) Real Estate JSC, said demand for apartments in the VND14 million to VND16 million ($756-864) per square metre mark was huge.
Vo Thi Hong, Director of Hai Thanh Company in HCM City, said developments for low-wage earners in the city had so far met just one-third of demand.
Meanwhile, Nguyen Thanh Long, Deputy Director of Dong Nai's Construction Department, said the province needed 1.4 million square metres of accommodation to meet demand.
Nguyen Van Duc, Deputy Director of Dat Lanh Real Estate Company, said that last year, demand for high-grade apartments occupied 70 per cent of the real estate market, whereas this year 70 per cent of demand was for low-income accommodation.
Chau said profits were greater in the low-end housing sector as customers were able to buy property outright.
Le Chi Hieu, Chairman of Thu Duc House Company's management board, said property firms were queuing up to invest in low-cost apartments and that competition was fierce.
The Ministry of Construction (MOC) said there were 263 registered low-income housing projects for 205,380 apartments worth a total investment of VND72.7 trillion ($3.9 billion).
Deputy Minister Nguyen Tran Nam, said around 30 projects would be launched this year. In Ha Noi and HCM City, 7,000 to 10,000 apartments would be made available to the market in 2010, he said.
There are around 2.5 million labourers in industrial zones and 3 million students currently looking for affordable housing.
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