The Disappearance of Affordable Apartments in the Market: Current Situation and Pressure on Housing Dreams

In the third quarter of 2024, the Vietnamese real estate (BĐS) market showed signs of recovery after a challenging cycle. However, this recovery primarily concentrated on the high-end segment, resulting in the near-total disappearance of affordable apartments. This situation has placed significant pressure on residents with genuine housing needs but limited financial capacity. The imbalance in supply and demand structures is pushing middle- and low-income families into increasingly difficult circumstances, making it harder for them to realize the dream of owning a home.

The lack of affordable apartments has led to a trend of migration to suburban areas, where land prices remain relatively affordable. However, this move has led to issues such as inadequate infrastructure, insufficient public amenities, and difficulties in accessing basic public services like schools, hospitals, and public transportation. Moving further away to find suitable housing also means increased daily transportation costs and time burdens, directly impacting the quality of life for workers.

Supply Structure Focused on the High-End Market

According to a report by the Vietnam Real Estate Brokers Association (VARS) in the third quarter of 2024, the residential real estate market has shown clear signs of recovery, but this recovery is not evenly distributed across all segments. Most new supplies belong to the high-end and luxury market, with average selling prices reaching nearly 60 million VND per square meter in Hanoi and 64 million VND per square meter in Ho Chi Minh City. This has caused affordable apartments to almost disappear from the market, leading to an increasingly severe supply-demand imbalance.

New projects primarily targeting the high-end segment have not only caused difficulties for young families and financially stable yet limited-income workers but have also exacerbated social stratification, where only high-income individuals can access housing opportunities. Some high-end projects even offer attractive incentives and luxury amenities, but their prices remain beyond the reach of the majority of residents. This situation is leading to an increasingly segmented real estate market, where low-income individuals are left with the options of renting or accepting housing far from city centers.

Current Difficulties: Searching for the Housing Dream

In the context of continuously rising real estate prices, residents with housing needs are facing significant challenges. New projects in major cities like Hanoi and Ho Chi Minh City are almost exclusively focused on the high-end segment, resulting in price levels continuously being set at new highs. This means that residents with limited financial capability have little to no opportunity to access apartments that meet their living needs.

Moreover, costs associated with homeownership, such as maintenance fees, management fees, and mortgage payments, are also rising significantly. Increasing interest rates on real estate loans have made it more difficult for middle-income individuals to access the funds needed to buy a home, making the dream of homeownership more distant than ever before.

Particularly, insufficient government support policies for social housing and affordable housing represent a major issue. Although some social housing projects have been promoted recently, the supply remains far from meeting demand, leading to a shortage that further exacerbates market pressure. This reality calls for a more comprehensive approach from the government to ensure that everyone has the opportunity to access housing.

Negative Impacts of Speculation and "Heat Generation"

Mrs. Pham Thi Mien, Deputy Director of VARS, pointed out that the market is showing signs of "heat generation," especially in land speculation and property price inflation. These behaviors have pushed apartment prices beyond their actual value, placing unnecessary pressure on those with genuine housing needs. Many small investors are participating in the market with short-term speculation motives, further eroding market stability and making the real estate market highly volatile and lacking transparency.

Speculative activities not only cause unreasonable price increases but also reduce accessibility to housing for residents with genuine needs. When real estate prices are pushed too high, market liquidity decreases, leading to increased market instability. Speculators often use strategies to create a false sense of scarcity, making buyers feel pressured to compete, thus making rushed purchasing decisions without thorough consideration.

Solutions and Future Directions

To address these issues, development policies should focus on affordable and mid-range housing to rebalance the market. The government needs strong intervention to regulate speculative activities and ensure market transparency. The development of social housing and affordable housing should be prioritized by providing legal and financial support to developers and homebuyers alike, thereby ensuring sustainable development and social equity.

Furthermore, investment in upgrading infrastructure in suburban areas is essential to reduce pressure on central regions. Improving transportation infrastructure, public facilities, and necessary services will enhance the attractiveness of these areas to homebuyers. At the same time, policies should be introduced to encourage enterprises to invest in affordable housing projects, thus providing more options for residents and helping stabilize the market.

Conclusion

The lack of affordable apartments is causing significant inconvenience and pressure for residents with genuine housing needs. To ensure the sustainable development of the real estate market, it is crucial to focus on providing supplies that match the financial capabilities of the working class, strictly control speculative activities, and improve transaction transparency.

In the future, Vietnam's real estate market needs comprehensive and systematic policies to meet the needs of all customer segments. Active participation from the government, businesses, and related parties is key to balancing the market and promoting sustainable development. The ultimate goal is to ensure that everyone, regardless of financial status, has the right to access housing. This is a fundamental factor in building a fair and stable society.

To achieve this goal, Vietnam's real estate market needs a substantial transformation to ensure fairness for all groups. Support policies, controlling speculative behavior, and investing in infrastructure development are critical to achieving comprehensive and sustainable growth while also creating opportunities for everyone to realize their housing dreams.