Southeast Asia Sees Unsold Homes Pile Up as Young Buyers Struggle

Southeast Asia’s housing paradox: too many homes, too few buyers

In parts of Southeast Asia, unsold homes are piling up as developers struggle to clear their housing stock.

At the same time, young buyers hoping to purchase their first property still cannot find an affordable home.

The contradiction reflects a widening mismatch between the homes being built and what aspiring buyers can afford, analysts say.

Speculative investment, financing hurdles and poor locations are among the factors leaving properties empty despite demand for affordable housing.

A mismatch between supply and affordability

The problem is therefore not simply a lack of homes. It is also a question of what developers are building, where those homes are located and whether buyers can secure financing for them.

Analysts say this mismatch has allowed unsold properties to accumulate while people seeking affordable housing remain unable to enter the market.

In Vietnam, the issue centres on the homes developers have built and the returns they expect, according to Nguyen Khac Giang, a visiting fellow at Singapore’s ISEAS, Yusof Ishak Institute.

Giang’s research examines the country’s increasing reliance on land to finance growth.

That approach can favour property investment over the housing needs of new urban families, according to the research.

The Vietnam example highlights how investment priorities can shape the housing available to buyers, even when demand exists for more affordable homes.

Across the region, the combination of speculative investment, financing barriers and unsuitable locations helps explain why new housing can remain empty while prospective first-time buyers continue to struggle.

Source: South China Morning Post