 |
Children are playing in the playground of a social housing area in HCMC (Photo: SGGP) |
The Hanoi Department of Construction has just announced that it started to receive registration documents for renting and buying houses at the social housing project in plot HH-02A or Trung Van social housing project in To Huu Street in Nam Tu Liem District. This is one of the social housing projects that low-income families have been waiting for but they were disappointed at the incredibly high price.
Incredibly high price
The Trung Van social housing project which was invested by NHS Construction Investment Joint Stock Company has 275 apartments including 225 social housing units. The apartments have an area of from 69.9 square meters to 76.8 square meters with the approved selling price of VND19,523,116 per square meter along with a maintenance fee of VND37,869 a square meter while the rental price is VND99,081 monthly.
In the first phase, 157 apartments were put up for sale while 68 other apartments were for rent. Customers will sign a purchase and sale contract in the second and third quarter of 2023 and are expected to receive the house in early 2025. Thus, people have to spend nearly VND1.5 billion to own the smallest apartment.
After the Hanoi Department of Construction announced the receipt of the application, many people in need come to find information about the project yet they all felt let down because the project was not like what the investor had previously announced. For instance, the project is located right on To Huu Street and only about 50m from the intersection of To Huu - Trung Van; however, the inside of the project's land is still mostly deserted and overgrown with grass. On the land, there is only one crane, and some rusty construction equipment is lying down while approximately 30 workers are constructing the foundation and basement of the apartment building.
According to many people, while the property market saw apartment supply drop and prices of an apartment increased, it is so happy that Hanoi had more social housing for sale. However, the high price of Trung Van social housing project is putting the homeownership dreams of millions of low-income earners even further out of their reach.
After understanding the information about the project, Mrs. Nguyen Thi Thuy and her husband in Luong Son moaned the project has a selling price of nearly VND20 million per square meter not to mention spending on real estate brokers and floors, monthly wage employees hardly afford an apartment.
Many experts believe that the price of VND20 million a square meter is too high compared to the ability of people who are eligible to buy social housing as they have to pay VND1.5 billion to own an apartment of more than 70 square meters and have to borrow about VND1 billion with an interest rate of 8.2 percent per year. Every year, a home buyer has to pay both principal and interest about VND150 million or more than VND12 million monthly which is almost beyond their affordability.
For many years, the number of social housing projects in the country did not meet the needs of the people, and most of them had high selling prices, beyond the reach of low-income people.
Specifically, 10 years ago, the Binh Chanh social housing project in Ho Chi Minh City had a selling price of VND12 million a square meter or the project of social housing at 35 Ho Hoc Lam in Binh Tan District was opened for sale in 2015 with a price at VND16.5 million a square meter. The number of social housing projects is very limited. In 2022, according to the Ministry of Construction, there are only 9 newly licensed social housing projects supplying 5,526 apartments nationwide.
The solution must be in sync
Currently, there are no social housing projects in Ho Chi Minh City for sale. Even, the projects that broke ground and started construction in previous years such as the social housing project in Nguyen Son residential area in Binh Chanh outlying district, the social housing project in Thu Duc City’s Long Truong Ward, social housing project in Tan Thuan Tay residential area project in District 7, a social housing project in Phu Huu Ward in Thu Duc City have stopped construction for a long time.
The Department of Construction of Ho Chi Minh City has just sent a written request to investors to urgently invest in the construction of social housing projects according to the approved guidelines and planning, and at the same time, investors should report the construction of social housing in 20 percent of the land fund in commercial housing projects.
Furthermore, the Department of Construction of Ho Chi Minh City has also reported to the People's Committee of Ho Chi Minh City and the Ministry of Construction on the State Auditor’s conclusions and recommendations on the operation of the Social Housing Program for the period 2015-2019 in districts 9 (before being merged into Thu Duc City), 12 and Binh Tan.
According to experts, in addition to the high price of construction materials, bottlenecks in the capital, land fund, and administrative procedures are the culprit for the high price of social housing projects. Mr. Su Ngoc Khuong from Savill Vietnam Company said that the procedure for investment in the construction, purchase and sale of social housing has been very complicated, prolonged, and even more difficult than commercial housing.
Without the implementation of synchronous solutions to reduce costs, the goal of building 1 million social housing apartments from now to 2030 will be difficult to complete.
The Department of Construction of Ho Chi Minh City has reported to the municipal People's Committee on solutions to promote the construction of social housing projects in the city. Specifically, the city People's Committee should direct departments agencies and the People's Committee of Binh Chanh district to prepare an investment project to build social housing for workers and workers at a land area of 14.5 hectares in Binh Chanh District’s Vinh Loc B commune and Binh Tan District’s Tan Tao ward.
