Local property market ready for fresh impetus

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Developers have been paying more attention to building affordable housing of late because of difficulties in the luxury segment, says an industry official.

"The real demand for luxury properties is very low," Nguyen Manh Ha, director of the Construction Ministry's Housing and Real Estate Market Management Department, told Thanh Nien. "Many developers have had to cut prices and offer a lot of perks to attract buyers. However sales have not been good."

On the other hand, local demand for affordable housing is very high and it's profitable investing in this segment, Ha said. The government also provides preferential policies to developers of housing projects for low-income groups, he added.

Ha said developers usually preferred luxury projects because of higher profits.

While it was not possible for the government to order developers to build affordable housing, Ha believed it was likely that there will be a shift towards lower-end real estate as the luxury segment remains weak.

"A series of new affordable housing projects that started recently will add more supply to the market," he said.

Many developers told Thanh Nien their projects in the affordable sector reported strong sales and some of them sold out immediately after their launch.

Tran Duc Phuong, director of real estate firm Nam Tien, said with mid-range apartments proving attractive to buyers he's optimistic about market prospects in the remaining months of the year.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said mid-range housing will be the key product of the real estate market both this year and the next.

Housing products priced between VND12 million and VND15 million per square meter will grow the most because both homebuyers and investors can afford them, Chau said.

According to a statement published last week by real estate consulting firm CB Richard Ellis, the trend for mid-range and affordable development would continue to flourish in the coming months.

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