However, there is a paradox as there are very few businesses invested in this type of apartment. The price of land in the outskirts of Ho Chi Minh City is increasing because public transport in these areas is almost complete. According to many real estate businesses, the price of land has increased from 20 - 30% in many places compared to a year ago, leading to difficulties in the development of low commercial housing prices.
Representatives of the Ho Chi Minh City Real Estate Association agree with this and have also said that there are still too many things that obstruct the development of low cost commercial apartments. Land tax for example, is a major obstruction.
Another problem that makes real estate businesses less interested in low cost commercial apartments is the pressure on investment returns. According to many investors, low-cost commercial apartment projects only bring 1/3 the profit of high-end apartments and sometimes even no profit at all.
City officials have also said that the city is building specific mechanisms to reduce investment costs in order to attract businesses to invest in low cost apartments. One of the areas that can be done right away is the reduction of time for administrative procedures.
The city is also planning to bring together design firms, construction companies, and construction materials to reduce each stage in the project for building low cost housing.
