‘Extinction’ of cheap houses on the market

Material prices increased sharply, pushing up apartment prices

A survey by PV Tien Phong showed that some construction material stores in Ho Chi Minh City quoted Ha Tien 1 cement prices increased by 5,000 VND/bag, to 92,000 VND/bag of 50 kg. Many material store owners forecast that the price will continue to increase because Ha Tien 1 Cement Joint Stock Company (Vicem Ha Tien) announced that it will increase the selling price by 100,000 VND/ton from March 23 for all kinds of cement. bag.

Similarly, a number of other brands also announced an increase in selling prices of 100,000 VND/ton for bagged and bulk cement products (including value added tax) from March 20.

The price of construction materials increased, forcing the investor to adjust the selling price in an upward direction.

According to Mr. Nguyen Quang Cung, Chairman of the Vietnam Cement Association, domestic cement is under great pressure to increase prices when input fuels such as coal and petrol increase in price. According to many construction contractors, the current gasoline price has increased by about 60% compared to the beginning of the year, making the cost of construction machine shifts on construction sites very high.

Not only cement, steel has also continuously increased in price and shows no sign of cooling down. Only in the first days of March, the price of construction steel continuously increased by 600,000-1,400,000 VND/ton depending on the type. Other construction materials such as sand and bricks also increased. At some points of sale of construction materials in Ho Chi Minh City, the price of sand is at 300,000 VND/m3, an increase of 10,000 VND/m3 compared to the beginning of the year, and brick and pipe increased by 100 VND/piece.

According to the Vietnam Steel Association, the price of raw materials from iron ore, coke coal, scrap steel … increased sharply after the Lunar New Year holiday, causing the billet price to increase sharply. As a customer to buy steel, PV Tien Phong was quoted, Vietnam-Japan steel was 21 million dong/ton, Hoa Phat steel was 20.4 million dong/ton, Pomina was 20.8 million dong/ton. Compared to the end of 2021, steel prices of all kinds have increased by more than 3 million VND/ton and are higher than the peak of 2021.

Mr. Ngo Quang Phuc, General Director of Phu Dong Real Estate Joint Stock Company, said that rising raw material prices are a big problem in the current market. This is one of the 5 types of costs that affect the price of a real estate product, in which iron and steel costs alone account for 15-20%, the rest are land, construction, management and profit costs. Karma. If the price of construction materials increases, forcing the investor to adjust the selling price in an upward direction. This will make customers hesitant to drop money.

Affordable housing disappears

Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA), affirmed that the real estate market in recent years has been distorted in terms of supply and demand when completely out of phase in high-end real estate.

“Affordable housing no longer exists in HCMC. Data from the Department of Construction of Ho Chi Minh City last year did not have any affordable apartment products on the market. This rate in 2020 is 1%”, Mr. Chau said.

Affordable housing no longer exists in HCMC.

According to Mr. Chau, in the past year, ordinary projects in Ho Chi Minh City were also pushed to high-end prices by investors, making the market no longer affordable apartment products that many people need.

With the segment of social housing, Mr. Chau pointed out that policies do not come from life, so there are many shortcomings. For example, with the old regulations, projects with 10 hectares or more must allocate 20% of the land fund for social housing, but in reality, many projects in Ho Chi Minh City with an area of ​​​​tens of hectares do not have any social houses. Meanwhile, the new regulation requires that projects with an area of ​​​​2 hectares or more have to spend 20% of the land area for social housing is even more impossible.

From a business perspective, Mr. Tran Quoc Dung, Deputy General Director of Hung Thinh Corporation, said that the current way of regulating social housing is inadequate, causing many difficulties for businesses. Especially for mid-range and high-end projects in the central area.

Mr. Dung gives an example of a project with only 2 hectares of land in Ho Chi Minh City. Thu Duc, the investor had to compensate for the high price, while the land money was deducted for the social housing land fund according to the state unit price, a huge difference that businesses would have to bear. This is sure to drive up commercial housing prices.

Mr. Nguyen Manh Khoi, Deputy Director of the Housing and Real Estate Market Management Department of the Ministry of Construction also admitted that the market is facing a huge supply-demand gap between segments. The supply of high-end housing is very large while it is difficult for most workers to access low-cost housing.

Mr. Khoi emphasized, if money is collected for the budget from the real estate sector but cannot ensure the welfare and housing for the people, this is not the policy the State wants.