Profit margins in low-cost housing segment are not as high as in the mid- and high-end segments, so property developers are hardly interested, said senior director of property consultancy CBRE Vietnam Duong Thuy Dung.
She added: "Although affordable apartments are the segment with huge demand, there has not been enough supply for several quarters.”
CBRE Vietnam predicted this shortage of new projects would continue in the near future, given that construction material and land prices and infrastructure costs are steadily increasing. The firm also expected affordable housing prices to increase by 3 percent per year.
Real estate firm DKRA estimated the average price in this segment at the end of the third quarter to be VND24 million ($1,030) per sqm, an increase of 12 percent from five years ago.
The local housing market is moving to suburban districts, where land is available and infrastructure is nearing completion. Urban development will shift away from the central districts and toward the East and West since facilities, utilities and connectivity there have improved significantly.
As Vietnam's biggest city and major economic hub, HCMC is now home to approximately 13 million people, including 4 million migrants from other parts across the country.
According to Nguyen Thanh Phong, HCMC People’s Committee Chairman, each year the Southern city's population rises by 200,000, and on average it would be one more million every five years, putting huge pressure on urban management, social and technical infrastructure and, especially, housing.
