Social housing is developed with the aim of meeting the housing needs of low-income residents and ensuring sustainable development for the community. In recent years, the trend toward social housing and the demand for affordable homes have been growing rapidly. Therefore, 2023 promises to bring many positive changes to this type of investment. Join LPC to learn more.
Social Housing – Its Concept and Inherent Significance
Social housing is a form of housing built or provided for low-income, middle-income, or disadvantaged groups to ensure better living conditions. Most social housing projects are often developed near major industrial zones, where large numbers of workers and laborers are concentrated. Social housing is also an important component of social policy and sustainable national development, ensuring that everyone has the opportunity to access basic services such as housing, education, healthcare, and employment.
Real Estate Trends in 2023 – A Positive Combination
The Rise of Green Development Trends
Following the recent COVID-19 pandemic, greater emphasis has been placed on green living and the selection of green architectural projects. Housing and apartment projects are increasingly focusing on maximizing green spaces and water features to create a healthier living environment. However, from a commercial perspective, projects that fully meet such standards are often relatively expensive.
People with middle or low incomes may find it difficult to afford apartments that follow this green living trend. Meanwhile, social housing projects today are often developed with green spaces, water features, and comprehensive amenities while still benefiting from government-supported pricing, making social housing apartments more accessible to buyers.
Read more: Ubot Flat Slab – A Green Material Solution for Construction
The Social Housing Boom
In 2023, the housing and apartment real estate market was expected to recover, while the demand for affordable housing was becoming a top priority for households. The Government had taken highly positive steps toward developing the project “Investment in the construction of at least 1 million social housing apartments for low-income groups and industrial workers in the 2021–2030 period.” Experts also expected 2023 to be a favorable time for this segment to make a comeback.
The Government’s significant increase in the supply of social housing in the coming years will help low-income residents and industrial workers address their housing needs while gaining access to essential services and amenities that support their daily lives.
The Trend Toward Digitalization
Today, Proptech – real estate technology – is considered a completely new step forward for the real estate market. Proptech combines the real estate industry with technology solutions such as artificial intelligence (AI), virtual reality (VR), augmented reality (AR), data analytics and prediction, the Internet of Things (IoT), blockchain, and many other technologies.
From 2021 to early 2022, at least five start-ups announced new funding rounds, potentially attracting around USD 500 million in investment.
2023 was expected to be a year of significant growth for technology in general and Proptech in particular, with further development anticipated as issues related to capital flows and legal frameworks were gradually resolved.
New Rental Housing Trends
As tenants’ needs continue to increase, competition among landlords is also intensifying, extending beyond rental prices to include additional amenities and services.
Older apartments that no longer adequately meet these amenity needs are creating demand for new apartments with improved features and facilities.
Today, social housing projects are developed to meet the essential needs of workers, providing buyers and tenants with a better living experience. Shopping centers, medical stations, and fitness services are examples of amenities that developers consider when constructing social housing apartment projects.
The Trend of Developers Moving into Construction Contracting
Choosing to purchase land and sell finished products for profit has created considerable financial risks for developers in recent years. Therefore, the shift toward construction contracting is increasingly being prioritized by developers.
Therefore, construction contractors undertaking social housing projects can feel more secure with guarantees and support from the Government. Accordingly, affordable housing is expected to become an inevitable trend in 2023 for both homebuyers and construction professionals.
Under government policies, buyers of social housing can receive support in accessing loans at low interest rates (8.2% per year as of June 30) under the VND 120 trillion credit package supported by the Government. The repayment period for these affordable housing loans is also relatively long, ranging from 15 – 25 years, giving buyers sufficient time to repay their debt without excessive financial pressure.
Along with government support and the potential strength of businesses in the industry, we also expect FDI investment and M&A trends to create new opportunities for the real estate market in 2023 and the years ahead.
Social housing has never gone out of demand. What do you think about these predictions? Share your thoughts and information with LPC.
— Lam Pham Construction Co., Ltd. – LPC
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