Apartment prices in Nghe An are constantly rising.
Currently, apartment prices in Nghe An have increased by approximately 30% compared to the same period in 2023. This gap not only creates significant financial pressure but also makes home ownership increasingly difficult for the majority of workers.
Supply is scarce.
For the past two years or so, apartment prices in Nghe An have been continuously escalating. Buying a home has become an unattainable goal for most workers, creating significant financial pressure.
Ms. Tran Thi Tinh, a young teacher in Vinh City, shared: "I've saved and borrowed over the years, accumulating about 1 billion VND, intending to buy an apartment. However, due to the scarcity of newly listed apartments and the continuously rising prices, a 60m² apartment costs around 1.5 billion VND."2Because it's beyond their financial means, the family is having to postpone spending and rent a house instead.
According to a survey of a large apartment project on Phan Boi Chau Street, Vinh City, with 25 floors and over 500 units, construction began in October 2022 and is currently nearing completion, with expected handover in December 2024. Prior to the start of construction in 2022, the developer sold units at a price of 15-16 million VND/m².2Most customers had already reserved their spots. Now, customers wanting to buy have seen the price skyrocket to 26 million VND/m².2.
Mr. Tran Minh Tam, from Nam Giang commune, Nam Dan district, who works at an electrical appliance store in Vinh City, shared: "For example, an apartment in Vinhomes Quang Trung in March 2024 was priced at 30 million VND/m²."2(Two years ago, the previous owner bought it for 23 million VND/m²)2), the homeowner is now selling it for 35 million VND/m².2This apartment is a high-end apartment in the city center, so the price is high. Unable to afford it, Mr. Tam's family is looking for apartments further away from the city center. However, the prices there also range from 23-24 million VND/m².2.
Right next to it is a resettlement apartment project for households in Quang Trung ward; in 2021, the price was only 14 million VND/m².2, now the price has increased to 26 million VND/m²2Other apartment projects in Le Loi and Vinh Tan wards previously had prices of 16 million VND/m².2, now priced at 25-26 million VND/m²2...
Boosting the construction of social housing will alleviate the shortage of apartment buildings.
The supply of new apartment units in Vinh City is becoming scarce because the province is no longer approving further apartment building projects in the inner city, aiming to preserve the architectural landscape and reduce pressure on the inner city. Currently, several new apartment projects in the area are under construction but unfinished, mainly consisting of older projects that the Provincial People's Committee had approved for investment and construction in previous years.
Mr. Nguyen The Phiệt, Head of the Housing and Real Estate Market Management Department of the Nghe An Department of Construction, stated: The scarcity of apartments and the resulting price increases are a common situation nationwide. Vinh City is currently implementing the construction of new apartment buildings, with an expected supply of nearly 1,000 apartments in 2024. However, due to high demand, most of the apartment projects under construction have already received reservations.
With apartment prices continuously escalating recently, home ownership opportunities for low- and middle-income groups in urban areas are becoming increasingly difficult, negatively impacting the government's social welfare policies.
Furthermore, to improve the price level of apartment units, the first factor is to improve the market supply. In particular, the development of affordable social housing will significantly reduce the average selling price of apartment units.
On October 9, 2023, the People's Committee of Nghe An province issued Plan No. 778/KH-UBND to implement the Project "Investing in the construction of at least 1 million social housing units for low-income earners and industrial park workers in the period 2021-2030" according to Decision No. 338/QD-TTg dated April 3, 2023 of the Prime Minister on the territory of Nghe An province. The goal of the plan is to develop social housing and worker housing at prices suitable to the affordability of low-income earners in urban areas and workers and laborers in industrial parks in the province.
With this project, Nghe An province strives to complete the construction of 28,500 social housing units during the period 2021-2030, in accordance with the target set in the Project "Investing in the construction of at least 1 million social housing units for low-income earners and industrial park workers," approved by the Prime Minister under Decision No. 338/QD-TTg dated April 3, 2023. Of these, 9,000 social housing units are for low-income earners, and 19,500 are for industrial park workers.
The project will be implemented in two phases: phase 1 from 2021 to 2025 and phase 2 from 2026 to 2030. To promote the development of social housing and worker housing in the coming period, Nghe An is implementing many solutions. These include accelerating the completion of the legal framework under its authority, strengthening reforms of administrative procedures related to investment in social housing construction to improve the environment and attract investment.
According to Mr. Nguyen The Phiệt, Nghe An province currently has three social housing projects underway. The first project is the KT Home social housing project for workers and laborers in industrial zones within the Southeast Economic Zone, built in Nghi Xa commune, Nghi Loc district, Nghe An province, with Kim Thi Real Estate Joint Stock Company as the investor.
The KT Home social housing project comprises 7 five-story apartment buildings with 525 apartments ranging in size from 37 to 69 square meters.2The project includes one house and 23 adjacent low-rise townhouses. The project is currently under construction and is expected to be handed over for use from Q3/2024.
In Vinh City, there are also two social housing projects: the project for low-income earners and employees in Hung Loc commune, Vinh City, invested by Nghe An Petroleum Trading and Investment Joint Stock Company; and the social housing project in Hung Dung ward, Vinh City. Both projects are currently under construction and are expected to be completed in 2025, providing an additional 140 apartments.