Continuously offering solutions to reduce house prices
Recently, the Ho Chi Minh City Real Estate Association (HoREA) has reported to the Prime Minister proposing some urgent solutions to solve the shortage of housing supply and reduce house prices. The purpose is to stabilize the real estate market towards transparent, healthy, stable and sustainable development.
Firstly, it is proposed to remove the “blockage” for commercial housing projects that “have the right to use land other than residential land in accordance with the master plan, land use plan, urban development planning, House.
Secondly, the Association proposes solutions to remove obstacles for real estate and commercial housing projects subject to legal review, inspection, examination and investigation in the direction of requiring investors to implement financial obligations or additional financial obligations to the State.
Third, propose solutions to remove “obstacles” in implementing regulations on separation criteria into independent projects for the “public land” area interspersed in commercial housing projects put up for auction. land use helps to increase the supply of housing projects.
Fourth, the Association proposed to consider and remove “obstacles” about the investment procedures and construction of commercial housing projects that businesses already have land use rights to help increase the supply of projects and products. housing for the real estate market.
Fifth, propose solutions to remove “entanglements” in calculating “land use fees” for commercial housing projects to help increase housing supply for the market.
Sixth, propose solutions to promote the implementation of “auctions of land use rights; bidding for projects using land” to select investors to help increase the supply of commercial housing projects for the real estate market. produce.
In addition, in order for the real estate market to develop in a transparent, healthy, stable and sustainable manner, HoREA said that the Government must also review to improve mechanisms and policies on capital market development, including including the money-credit market, the stock market, the corporate bond market, coupled with the development of property tax policy.
The association also proposed assigning the Ministry of Planning and Investment to assume the prime responsibility and coordinate with the Ministry of Construction, Ministry of Natural Resources and Environment, Ministry of Finance and Ministry of Justice in formulating investment procedures for construction of commercial housing projects. standards” for localities across the country to uniformly implement, contributing to increasing the supply of projects and commercial housing products to the market.
In the recent report on housing and real estate market information in the first quarter of 2022, the Ministry of Construction said that apartment prices continue to rise, making the income of people in big cities unable to keep up. Accordingly, apartment prices in all localities tend to increase, the average increase rate is about 3% compared to the end of 2021. In Hanoi, apartment prices increase by 4-5% higher than compared to the end of 2021. in Ho Chi Minh City, an increase of about 1-2% compared to the end of 2021. Commercial housing projects in the central areas of urban areas have almost no apartments with prices below 25 million VND/m2.
In the segment of single-family homes and land plots, the price increase range was even stronger than that of condominiums, with an average growth rate of about 5-10% compared to the previous quarter.
At the end of March 2022, some areas near Hanoi, Ho Chi Minh City and in the provinces of Thai Binh, Lam Dong, Khanh Hoa, Da Nang, Dong Nai… there was a phenomenon that the price and volume of land transactions increased rapidly. In some places the price increased by 15-20% compared to the end of 2021.
The bottleneck lies in the supply
According to most experts, of the many reasons for the increase in real estate prices, the scarcity of supply in the market is considered the main reason.
Mr. Le Hoang Chau, Chairman of HoREA, the real estate market is very short of housing supply, especially affordable commercial housing (affordable housing) and social housing. These are two types of housing that meet the real needs of the majority of middle-income people and urban low-income people.
Due to the lack of supply while the aggregate demand is very large, according to the law of supply and demand, housing prices have increased continuously for more than 5 years. This is reflected in the housing price index of our country which is more than 20 times higher than the average income of the society, making it difficult for many households and individuals to create houses. While compared with industrialized countries, the house price index is only 6-7 times higher than income.
Chairman of the Ho Chi Minh City Real Estate Association emphasized that the market situation of both supply and demand imbalance and the “out-of-phase” imbalance in the high-end housing segment has been very evident in the last two years. Here, when affordable housing only accounts for 1% of the new housing supply in 2020 and disappears in 2021, while high-end housing accounts for 74%. All of the above signs of volatility have potential for instability in the real estate market and instability in housing social security.
Over the years, the real estate market has witnessed many times of increase in selling prices, despite the decrease in the number of transactions, which is said to be contrary to the usual rules, but the price increase of the market has been predicted in advance, because legal obstacles make the market short of supply
According to Mr. Nguyen Van Dinh, Chairman of the Brokerage Association, there are thousands of real estate projects in the country awaiting approval for implementation. Problems in the procedures, process of granting and approving projects have caused a shortage of new supply in the real estate market over the years. This is the reason why real estate prices are constantly setting new price levels.
This expert admits, currently, the market has not been able to prevent the land fever completely. Real estate prices are forecasted to still increase, project supply is still in short supply. Obviously, the supply is scarce in the context of increased investment and continuous cash flow into real estate, then an increase in real estate prices will occur.
“If the market is abundant with supply, supply and demand will self-regulate. When there is a lot of supply, investors will sell at a high price, no one will buy it. They have to adjust to reasonable demand, real estate prices will then be balanced.” Mr. Dinh emphasized.
Ms. Duong Thuy Dung, Senior Director of CBRE also said that, in Ho Chi Minh City, the new supply only recorded products in the high-end segment. The scarce supply made the absorption rate of the market very high, especially in HCMC.
CBRE Senior Director said that it is expected that primary apartment prices will continue to increase in the future due to rising land costs, escalating construction costs, many new products in the higher segment, stable demand and temporary supply is still limited.
Source: CafeF
Source: Vietnam Insider