Alarm at low-income housing prices

Viglacera Infrastructure Investment Development Company, developer of low-end residential complexes at Dang Xa urban area in Hanoi’s Gia Lam district, offered its products at VND11.6 million ($560) per square metre.

Company’s deputy general director Le Ngoc Uoc said the set price was reasonable since the firm could save part of input costs by procuring building materials from parent company Viglacera Corporation and use preferred loans.

Of Hanoi’s housing complexes for low-paid people only the above project promulgated pricing while most others, such as the Kien Hung resettlement area in Hanoi’s Ha Dong district developed by Vinaconex Xuan Mai Concrete and Construction Joint Stock Company in cooperation with Vinaconex 21 Construction Joint Stock Company and Sai Dong urban area’s housing complexes in Hanoi’s Long Bien district developed by Hanoi Housing Investment Development Company 3, were yet to set prices.

However, the pricing at these residential complexes was rumored to be around VND14 million ($67.6) per square metre.

The price range of over VND11 million to VND14 million was considered high, nearly double that in other locations.

For example, this was set at VND5.8 million to VND8 million per square metre in Ho Chi Minh City, and VND5.5 million in Danang City.

Commercial housing in Ho Chi Minh City fetches between VND12-14 million per square metre.

Deputy Construction Minister (MoC) Nguyen Tran Nam said it was appropriate to offer low-end housings at around VND10 million ($483) per square metre amid comparatively stable building material prices, particularly that of cement.

Nam said if the rumour was true the MoC would launch inspection and seriously consider the case.

Head of MoC’s Housing and Property Market Management Department Nguyen Manh Ha said the pricing of low-end housing must be based on particular regulations to ensure construction firms not incur losses.

The Hanoi Construction Department was responsible for appraising pricing rates set by construction firms and those firms over-charging customers would have to deal with the courts, according to Ha.

Under existing regulations, developers of housing projects for low-paid people benefit from a number of incentives such as exemption of land rental and corporate income tax and access to preferred loans. Besides, some developers can source building materials at preferred prices from other affiliates of the same groups like the case of Viglacera Infrastructure Investment Development Company.