Low-cost housing or social housing is not always feasible, it should be located in areas with appropriate transport infrastructure, serving the people living and working in the area to limit the movement.
In addition, administrative procedures should be reduced to accelerate progress, supported by the policy of land use fee exemption and reduction … These are real requirements in the construction of the social housing in Hanoi today.
The project far from the center is difficult to sell
According to the notice of Hanoi Construction Department, the project of social housing Bamboo Garden in Quoc Oai new urban area, Quoc Oai district is open until the seventh phase, with a total of 297 apartments, but only 15 documents are qualified enough to sign sales contract. The reason is that the project is quite far from the city center, the connection by means of public transport is limited so it does not attract the attention of customers, while the demand in the area is not much.
Not to mention, the temporary housing price which is about 430USD/sqm has already included VAT and 2% maintenance fees, the rental price that is about 2USD /sqm/month is also higher than other similar social housing projects.At the social housing project of Kim Chung commune, Hoai Duc district, after four rounds of sale, the list of registered buyers sent to Hanoi Department of Construction was very little, while the project scale had more than 1,000 apartments. The reason is, the price of apartments is about 608USD/sqm, higher than the price of land in the area.Along with that, the interest rate support policy for homebuyers from the 1,32 billion USD package has ended so the number of buyers has decreased. This contrasts with the view of lining up for filings, the purchase of social housing at projects in urban districts.The report of the Housing Management and Real Estate Market (Ministry of Construction) said that the current inventory of real estate has decreased, the inventory is mainly land in the project far from the center, which doesn’t have enough lower layer. Up to February 20, the total value of real estate inventory is about 1.32 billion USD, of which in Hanoi, the value of real estate inventory is 242 billion USD, down 2.2 million USD compared with December 2020.
Land value occupies 30-45%
Analyzing the components of the selling price of apartments, Mr. Su Ngoc Khuong, Director of Savills Vietnam, said that the value of land occupies 30-45% of the total value of the land. Along with that, the process from approval to completion of the project lasting 3-5 years also affects the cost of the project. Therefore, in order to reduce the selling price, it is necessary to reduce land use levy, tax, legal aid, withdraw investment procedures to speed up the progress, increase the feasibility and opportunities for the project.Then, the construction of affordable housing must be geared to areas where there is a real need, people will choose the appropriate housing for their work and life, if not meet this condition, no matter how low the price of housing is, it cannot attract the customer.
Therefore, the investor needs to thoroughly understand the needs in the project area, as well as the demographic, occupational elements, household income, and the development of the infrastructure, public benefits will be enough to meet the needs of the community after formation.Given that low-cost housing is currently limited to locations far from the center, the quality of infrastructures such as schools, hospitals, water supply and sewerage stays at a relatively low level, Mr. Khuong suggested low-cost housing projects to be located in an area with proper transport infrastructure, mainly serving the people living and working in the area without having to move frequently, leading to the pressure of vehicles getting into – in that are already overloaded.Regarding the financial support policy, Mr. Vu Ngoc Dam, Head of Housing and Urban Development (Hanoi Department of Construction), said that the focus should be on buyers and that large credit packages should be available soon like the last 1,32 billion USD package. At the same time, businesses should be encouraged to develop affordable commercial housing projects in addition to social housing, with a suitable apartment area, and the investor and buyer can be more flexible in buying – selling products.According to Minister of Construction Pham Hong Ha, the mechanism and policy of social housing development are quite complete, synchronous, the problem is how the local implement. As the state management agency, the Ministry of Construction coordinates with other ministries and sectors to propose to the National Assembly, the Government solutions on capital, credit and tax, mobilizing financial sources for social housing development. In particular, the Ministry will strictly control the planning, exploitation and effective use of urban land fund for social housing development, require investors to strictly implement the commercial housing project that must spend 20% of the land fund for social housing, do not allow conversion by the payment, to get the social housing slower to the center. Mr. Vu Ngoc Dam said: due to the large market demand, many investors are turning their focus on low-cost housing development. Under the regulations, investors only enjoy a 10% profit but receive land and tax incentives.
You are reading the article “Low – Cost Housing – Not Always Built Anywhere” in the section “Real Estate News” on the website: https://realestatevietnam.com.vn/.
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