The HCM City housing market showed signs of unsustainability in 2018 due to an imbalance between supply and demand (Photo: cafeland) HCMCity (VNS/VNA) - The HCM City housing market showed si🐟gns ofunsustainability in 2018💯 due to an imbalance between supply and demand, aproperty industry business group said.
In a review of themarket in 2018 and forecasts for 2019, the HCM City Real Estate Association(HoREA) said there was excess supply in the high-end segment.
While low-end condosaccounted for only 24.7 percent of total supply, the high end accounted for 30percent.
The association’schairman, Le Hoang Chau, said this made the market top-heavy and unstable,explaining there is equilibrium only when the low-priced segment is the mostdominant followed by the mid-priced segment and then the high-endsegment.
In 2018 there was ashortage of housing for low-income people, he said.
But he assured that abubble was not forming and there has in fact been a slowdown in new projects,supply and the number of transactions.
Speaking about themarket next year, HoREA said there would be many challenges.
The trade conflictbetween the US and China would have a bearing, it said, adding that high crudeoil prices have an impact on the country’s economy in general and the realestate market as a result.
According to the organisation,foreign direct investment in housing would increase in 2019 but there would bea shortage of land.
While the mid- andlow-priced segments, including condos priced at around 1 billion VND (43,000 USD),would continue to see much of the demand, supply would remain modest, it said,adding that the high-end condo segment would likely face challenging times nextyear.
Chau predicted toughcompetition in the segment because of excess supply. He said competitiveprojects would be those in ideal destinations with many amenities, and high-endcondo projects in central areas would be more competitive because authorities wouldnot grant a licence to any project in this area.”
The association saidnext year the city would call for bids for nine social housing projects.
The industrial property,office and co-working office segments would develop strongly in 2019, it said.
The associationassured that there would be no bubble forming in the market next year either.
Chau explained thatauthorities had experience in taking timely measures to control the market andprevent any bubble.
"Propertydevelopers, banks, investors, and buyers too have experience by now," hesaid.
The association saidnext year it would be hard for developers to borrow from banks 𝔉since creditgrowth is♛ expected to be only around 16 percent. –VNS/VNA
