Policies to troubleshoot barriers for social housing development

At the workshop "Building an overall social housing policy in Vietnam in the period 2021-2030" held by the Ministry of Construction on April 20 in Hanoi, experts proposed several solutions to remove barriers for social housing development and to assist poor people to have their own houses.
At the workshop, experts said social housing nearly disappeared from the current market; therefore, they suggested some solutions to tackle the present difficulties in the real estate market in a bid to help low income earners to settle down.
Policies to troubleshoot barriers for social housing development ảnh 1
According to the Ministry of Construction, the country has so far completed 249 social housing projects comprising more than 104,200 apartments in a total area of about 5.4 million square meters for low-income people in urban areas, workers in industrial zones.
Besides, localities are continuing to deploy 264 projects including 219,000 apartments. However, this number is still low compared to the plan, only reaching 42 percent of the National Housing Development Strategy’s goal.
In particular, the number of social housing in the total housing supply in localities is only accounting for 1.02 percent. In fact, statistics have shown that the number of low-priced houses under VND2 billion has decreased sharply since 2020. Currently, there are not many projects with apartments pricing below VND25 million per square meters. For instance, in Hanoi, a few social housing projects with the price below VND20 million per square meters are on sale in areas far from the center and in underdeveloped infrastructure districts such as Thanh Tri, Tu Liem, Dong Anh and Ha Dong meanwhile there are almost no apartment projects with prices below VND25 million per square meter in Ho Chi Minh City.
Presently, according to information recently announced by the real estate trading floors, real estate prices are still increasing in all segments, in which low-priced apartments have the highest increase. According to a survey of the Project on Construction of General Social Policies in Vietnam in the period 2021-2030, supported by Korea International Cooperation Agency in Vietnam, called KOICA, (Korea), in the last 5 years, the price of social places in Ho Chi Minh City has been increase about 20 percent.
The demand has continued to far outpace the supply leading to unlawful purchase and trade of social housing. Recently, real estate agents have offered to sell for VND150 million for a social house in Ha Dinh social housing project in Thanh Xuan District and the NHS Trung Van project in Nam Tu Liem District in Hanoi although they are not eligible to open for sale. Many people agreed to buy despite the risks.
Director of Housing and Real Estate Market Management Department Bui Xuan Dung said the supply of affordable housing still fails to meet increasing demand of low-income earners because the development of social housing is facing many problems. First of all, the budget allocated to the Bank for Social Policies is low with about VND2,163 / 9,000 billion satisfying 24 percent of the demand in the 2016-2020 period. Meanwhile, the capital source to compensate the interest rates for credit institutions to provide loans for the implementation of social places policy has not been provided so far.
In some localities, in urban planning, industrial zones, the land fund for social place development is not clearly defined, regulations on spending 20 percent of the land fund in commercial housing projects to develop social places have not been strictly implemented. or arranged but located in unfavorable locations or the ground clearance has not been completed. Besides, the mechanisms and policies for development of social places are not synchronous and not strong enough. Worse, some improper policies are not consistent with the market mechanism, not encourage investors to pour money to build social houses.
Therefore, Mr. Dung said many difficulties and obstacles in the policy of developing social housing will be solved in the coming time. At first, the Ministry of Construction reported to competent authorities to consider and soon allocate more capital sources according to the Government's Resolution No. 41 to balance an additional VND1,000 billion for the Bank for Social Policies and an additional VND2,000 billion to subsidize interest rates for four commercial banks to provide preferential loans for social housing purchase.
KOICA International Cooperation Agency (Korea) on April 20 handed over the results of the Project on Construction of comprehensive social housing policies in Vietnam in the period 2021-2030 using ODA grants. re-government of Korea to the Ministry of Construction. According to the project results, experts have surveyed the real situation of social housing in eight big cities such as Hanoi, the Northern City of Hai Phong, Ho Chi Minh City, the Northern Province of Bac Ninh, the southern provinces of Dong Nai, Binh Duong.
From the survey results, experts forecast that the period of 2021-2030, Vietnam needs 524,576 apartments on the area of 34,756 square meters. In which, HCMC needs 198,821 apartments, equivalent to 13,035 square meters.
Korean experts also proposed some solutions including the housing savings form of the social policy bank amongst employees and workers in industrial parks. In order to attract investors, localities should adjust mechanisms and policies so that investors increase their profits when carrying out social housing projects.

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