Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association (HoREA), recently called on developers to consider increasing investments in the affordable and social housing segment as it carries low risks and will help solve a chronic problem facing the city. Affordable housing is defined as costing below $1,000 per square meter.

A supply shortage in the affordable housing segment is causing insecurity among low-income people, especially blue-collar workers and immigrants, while there are signs of oversupply in the high-end market, he said.

Of nearly 16,900 housing units launched in HCMC last year, just 1 percent was in the affordable segment, according to the municipal construction department.

The 163 affordable units that entered the market in 2020 marked a year-on-year plunge of nearly 99 percent, while both the mid-priced and high-end segments saw double-digit increases.

Huynh Phuoc Nghia, a lecturer at the University of Economics Ho Chi Minh City, said businesses cannot be forced into the affordable segment as they have the right to choose where they will invest after after calculating a project’s profitability.

The government should encourage affordable housing development with new policies like letting real estate companies buy or rent land at low prices, he told local media.

A large pool of low-priced land will help bring down prices in the market as developers compete for customers, he added.

The leader of a real estate company who asked not be identified said that rising land prices due to limited supply have made developers neglect the affordable segment.

The demand for mid-priced and high-end housing is shown in higher demand in these segments, and developers are, therefore, continuing to focus on them, he added.