There has appeared an imbalance in the housing market in HCMC this year with high-end apartments increasingly abundant while homes for low-income people falling short, according to a recent report of the HCMC Real Estate Association.
The January-June report released last week was compiled from data of 1,058 members of the association, including 582 enterprises and 476 individual traders based in HCMC.
There were 34 apartment projects eligible for capital mobilization in the first half of the year, supplying a combined 14,901 units to the city market. Of the total, the number of mid- and high-end apartments picked up 16% while low-end apartments dropped by 18.9% against the same period a year earlier.
The figures did not include the fully done projects, land lot projects and those which were not approved for capital mobilization.
The report said high-end apartment projects are booming in the eastern part of HCMC, from the western bank of the Saigon River in Binh Thanh District to districts 1, 4, 2, Thu Duc and 9, with massive house sales of Vincom, Novaland and Sacomreal.
In the six-month period, the property market of HCMC also witnessed a surge in secondary investors who mainly bought and sold mid and high-end apartments in inner-city and southern areas in the period.
There were reportedly disputes relating to project developers like at Harmona, Bay Hien, Rubyland and Petrolandmark in the year to June. These projects were products of a property bubble in the years 2006-2007.
The investors of the projects were said to be unprofessional, financially incapable and use bank loans for wrong purposes. Besides, problems at the projects resulted from the lax management of credit institutions and the investors not strictly complying with regulations on investment, construction, mortgage and sale.
According to the association, such incidents hurt market confidence and affected the property market in the first half of this year.
Regarding the resettlement housing segment, the HCMC government resolved problems with the implementation of 17 resettlement projects comprising a total of 6,525 apartments and land lots in the first six months.
The city has completed 7,220 out of 8,550 resettlement apartments while the remainder are under construction.
According to the association, the State Bank of Vietnam was more cautious about its credit policy when issuing Circular 06/2016/TT-NHNN on May 27 to raise the risk weight of loans for the real estate sector to 200% and set a target to reduce credit supply for the sector within two years. This move has forced property developers to look for other sources of capital.