Housing market keeps developing

Furthermore, its quality of growth is good as seen from the reducing credit growth and inflation in 2015-16 compared with 2004-11. 
Private consumption has also surged, he said. 

Other factors that would boost the housing market include the rapid growth of the middle-class, which is expected to jump from 12 million in 2012 to 33 million by 2020, he said.

The rise of the private sector and the resultant boost to productivity, the rapid infrastructure development and the stable economy would be other important factors, he added.

Nguyen Tran Nam, Chairman of the Vietnam Real Estate Market, concurred saying, “Demand and supply will continue to grow like they have since the beginning of 2014.”

Nguyen Thi My Phuong, CEO of Tien Phuoc Real Estate Joint Stock Company, said she is totally optimistic about the future of the housing market.

“Since the beginning of this year, the market has witnessed strong growth in all segments -- apartments, villas, townhouses, and land.

“Prices have increased in all segments. The number of transactions has risen sharply at projects with a good location and developed by prestigious developers.”

A Savills Vietnam executive was also optimistic about the market, saying it would be healthy in 2017. 

Participants agreed that while both supply and demand would increase in all segments, the mid-range and townhouse categories would rise the fastest.

Tuan said sales of luxury housing peaked in the fourth quarter of last year, and demand and prices are set to fall while supply has kept increasing.

In the first nine month of this year sales in this segment has been down 10 percent, he said.

Supply, demand and prices of mid-range apartments and townhouses would rise from now through 2018, he said.

Nam said with the growing population, every year the country needs around 100 millions square metres of housing.

Rapid urbanisation has brought huge numbers of people to cities, pushing demand up there, he said, warning that there is still a mismatch between demand and supply.

“Supply has increased, demand is growing, but they do not meet each other because they are in different segments,” he said. 

Developers are focusing greatly on the high-end segment while 70-80 percent of the demand is in the low and mid-end segments, he pointed out. 

“There is a discrepancy in the property products structure.”

An executive from a construction company said projects with high quality and affordable prices are winners whatever segment they are in.