Vietnam in dire need of low-cost condominiums
VietNamNet Bridge
10 January 2017

A budget condo block in HCMC in this file photo. Vietnam is predicted to continue lacking of low-cost condo units in the next 10-15 years.

Marc Townsend, managing director of CBRE Vietnam, a major property management and consulting services provider in the country, said Vietnam will face a serious shortage of budget condos in the next 10 years.

Demand has outpaced supply in this segment for a long time, Townsend told local media, and the good news is hundreds of thousands of units costing around VND1 billion (US$44,400) each would be launched in the coming time.

Townsend said the absorption rate in the low-cost segment would range from 40% and 50%, probably 60% late this year, while condo prices in the segment would be stable.

Le Hoang Chau, chairman of the HCMC Real Estate Association, said the real estate market in major cities such as Hanoi and HCMC (Saigon) would face a sharp shortage of low-cost condos until 2030.

HCMC is currently home to around three million migrants who have high demand for budget homes but only 15% of their demand has been met by State-owned property developers while the rest need commercially built homes costing between VND700 million and VND1 billion ($40,500–58000 CDN each.

Data of the HCMC Institute for Development Studies said the city needs 81,000 low-cost condo units for officials, civil servants, soldiers and employees of State-owned firms in the 2016-2020 period.

Stephen Wyatt, general director of Jones Lang LaSalle (JLL) Vietnam, said property enterprises have paid little attention to the low-cost apartment segment in HCMC and Hanoi due to small profit margins.

He said the low-cost segment is the backbone of the property market as there are a lot of customers.

According to the Japan External Trade Organization, the average monthly salary of a Vietnamese worker last year was $145 in Hanoi and $148 in Ho Chi Minh City, much lower than those in Jakarta, Manila, Kuala Lumpur, Bangkok and Singapore (between $239-1,230 USD).

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