Market waits for regulations on small apartments
The property market awaits technical standards for the development of small apartments, which may become a trend to deal with the housing crisis caused by the country’s rapid urbanisation.
A 28 sq.m model apartment at VinCity Ocean Park.
At the end of last year, the Ministry of Construction gave the green light to HCM City to study the development of apartments with areas ranging from 25sq.m to 45sq.m. The city was allowed to have around 20 to 25 per cent of new apartments fall within this range while waiting for official regulations.
The ministry is compiling the national technical standards for apartments, which are expected to set the minimum area for commercial apartments at 25sq.m.
The in-effect Law on Housing 2014 does not regulate the minimum area of an apartment. But the Government’s Decree No 100/2015/ND-CP, dated October 20, 2015, set the minimum area for a social housing apartments at 25 sq.m.
Due to the lack of regulations, the development of small apartments has been a controversial topic. Some worried small apartments might turn into slums, while others said they would meet a majority of the market demand.
The ministry said the market was showing high demand for affordable small apartments. For example, studio apartments at VinCity Ocean Park with areas from 28sq.m to 33 sq.m, priced from VND23 million (US$1,000) and VND30 million, recently released for sale and were reportedly already sold out.
According to real estate and investment management services firm Jones Lang Lasalle (JLL), small apartments are becoming a popular trend in crowded cities – home to over half of the world’s population – where space is sparse, costs are high and finding a suitable place to live is a real challenge.
Stephen Wyatt, country head of JLL Vietnam, said Ha Noi and HCM City had significant potential to build micro apartment units.
Most city-dwellers could only afford larger apartments far from the central areas, but young urbanites now prefer small units in the heart of the city with adequate services, he said.
Micro apartments were a solution, he said, adding that many developers were building units that cater to these changing tastes.
According to Nguyen Trong Ninh, Director of the ministry’s Housing and Real Estate Market Management Department, there is huge demand for apartments smaller than 45 sq.m, which are affordable to lower-income workers, singles and young families.
Micro units were a potential solution to the shortage of social housing projects and affordable homes, Ninh said.
Countries like France, Korea, Thailand, Singapore and Malaysia all allow the development of micro apartments.
A minimum apartment area of 25 sq.m to house one to three people fits with Viet Nam’s national housing development strategy, which targeted a minimum housing area of eight sq.m per head by 2020.
Ninh said housing quality was not only decided by area but also by construction quality, facilities, infrastructure and quality of services. For this reason, small apartments are not always slums.
Property expert Dang Hung Vo said it is time to encourage developers to build micro apartments to cope with the shortage of affordable homes.