HCM City suffers from a housing shortage caused by a rapidly rising population and shortage of new projects. VNS Photo Văn Châu

HCM CITY – Housing prices continue to rise rapidly in HCM City because of a shortage of new supply, increasing population and lack of transport infrastructure in outlying areas.

It has become very difficult to find apartments for less than VNĐ 2 billion (US$ 85,500) in the city.

Prices are up 5-10 per cent compared to just six months ago.

At one apartment project in District 1, an 85sq.m unit with two bedrooms costs VNĐ 21 billion (nearly $900,000). Apartments measuring 140-180sq.m sell at VNĐ47.7-50 billion.

A bit further from the city centre, in Thủ Đức District, near the Hà Nội Highway, apartments in the Tân Hải Minh project was selling at VNĐ35-40 million last year, but now cost VNĐ50-60 million per square meter.

Lê Hòang Châu, chairman of the HCM City Real Estate Association (HoREA), said housing prices continue increase because of a lack of new projects and demand far outstripping supply.

Administrative procedures take too much time while transportation between the central and suburban areas is not good, meaning people do not want to stay outside the main areas, he said.

With the Government likely to take time to simplify the administrative procedures, developers could now price their projects at whatever level they want, he added.

The rapidly rising population is also a reason for the soaring housing prices.

HoREA pointed out the city’s population increases by one million every five years. The Department of Construction has said 476,000 families lack housing while 21,000 others living along canals and 35,000 living in dilapidated apartments need to relocate.

To resolve the shortage, HoREA has called on authorities to build more housing at reasonable prices for low-income people and simplify administrative procedures for social housing projects, Châu said.

Lê Hữu Nghĩa, director of Lê Thành Real Estate Company, said his company submitted a proposal for a social housing project in Bình Chánh District in March, but has not heard back from the Department of Planning and Investment though the project area is earmarked for social housing.

“We recommend that the Government should speed up and simplify administrative procedures and draft new policies to encourage investment in social housing.”

Trần Khánh Quang, general director of Việt An real estate Company, said the Government should also create support policies for first-time buyers of housing. This would also preclude the purchase of social housing as an investment, he added.

Châu said HoREA has called for upgrading traffic infrastructure to link the five suburban districts of Củ Chi, Cần Giờ, Bình Chánh, Hóc Môn, and Nhà Bè with the city’s central areas so that they become more attractive as residential areas. – VNS