Apartment buildings in HCM City's District 7. — VNA/VNS Photo

Demand for 50,000 dwellings remains unmet annually in HCM City, leading to pent-up demand, experts said.

The housing affordability challenges lie in the significant decline in supply across all segments.

This is a combination of legal constraints, developers’ issues, and a turbulent financial market, said Giang Huỳnh, director of Research & S22M at Savills Vietnam.

Supply in neighbouring markets such as Bình Dương, Đồng Nai and Long An provinces also falls short of demand, she said.

Future supply is also limited, with HCM City seeing more high-end products in the short term and less affordable options, she warned.

Key factors influencing these trends include rising incomes, scarce and expensive land, and slower administrative processes limiting new projects.

Addressing the challenges of housing supply and affordability requires a multifaceted approach.

It is evident that the private and public sectors could not tackle the problem alone and need to collaborate, she said.

The national budget is strained, and rising interest rates would make it difficult to finance affordable housing projects, while the private sector faces rising construction, labour, and finance costs, she said.

Effective collaboration between the private and public sectors is essential, she added.

Lê Hoàng Châu, chairman of the HCM City Real Estate Association, said the development of affordable housing requires reasonable land prices, but that is extremely difficult now.

To create housing for low- and middle-income people, a separate policy is needed to coax real estate businesses into developing affordable housing, he said.

Nguyễn Văn Đính, chairman of the Vietnam Association of Realtors, said the development of affordable housing would help correct the supply-demand imbalance and reduce housing prices across the board.

There should be preferential credit policies designed to increase demand and attract investment in affordable housing, he added. —VNS