The supply of homes plummeted on the local market in 2019, as inspections of construction, investments and land use at some property projects left a chilling effect on investors, said Nguyen Van Dinh, vice chairman of the Vietnam Association of Real Estate Brokers.

A housing project in HCMC’s District 2. The supply of homes plummeted
on the local market in 2019 – PHOTO: LE ANH 

Statistics from the association indicate that the housing supply in 2019 amounted to some 107,280 units, equal to 61.5% of the 2018 supply, while a mere 72,820 real estate transactions were completed, equal to 64.7% of the 2018 amount, according to baotintuc.vn.

Hanoi City saw construction of 58 housing projects, with 26,800 apartments eligible for sale, down over 3,010 units against the 2018 figure of 69 projects with 29,828 apartments.

Long Bien, Gia Lam and Ha Dong districts saw an oversupply of housing last year, while the supply of homes in some central districts was limited, as land for real estate projects was nearly used up.

The HCMC property market also saw real estate transactions drop last year, as home supplies plummeted and property prices continued to rise, apart from regulations tightening credit for the real estate sector.

Along with the emergence of a number of real estate projects not in compliance with prevailing regulations, this has led to hesitation on the part of investors and home buyers.

Speaking at a recent meeting reviewing the 2019 real estate performance and outlook for 2020, Dinh said that this year, the country’s economy is expected to remain stable and continue its upward spiral. The strong demand for investment in, and purchase of homes, is forecast to continue rising.

The supply of homes in 2020 is not likely to fall compared with 2019, as a slew of major real estate projects with huge amounts of apartments have yet to be completed this year in the northern and southern markets.

However, the number of eligible projects is expected to drop as the two major cities have yet to improve procedures for licensing and approving new housing projects.

In addition to a hike in prices of homes, the cost of land is expected to continue to jump, and tight controls over loans in the property sector will discourage small and medium real estate firms to invest in housing projects this year, according to the association.

Besides this, the association predicts a scarcity of low-cost houses and social homes this year.