Budget housing under the microscope

The Ministry of Construction (MoC) Inspectorate has just aired a decision to inspect six low-cost housing projects in Hanoi.

MoC chief inspector Pham Gia Yen said inspectors would focus on how developers have calculated housing costs, which were viewed as unreasonably high compared to actual construction cost.

In fact, many social housing projects came onto Hanoi’s market from early 2011.  These are 19T3, 19T5, and 19T6 blocks in Kien Hung resettlement area in Hanoi’s Ha Dong district with 864 apartments developed by Vinaconex Xuan Mai, two low-end housing projects with 946 apartments in Gia Lam district’s Dang Xa urban area and Dai Mo housing complex in Tu Liem district with 124 apartments developed by Viglacera Corporation, and a low-end residential block in Sai Dong urban area in Gia Lam district with 868 apartments jointly developed by Hanoi Housing Investment and Development Company 5 and Hanoi Construction Company 3.

However, the price set by developers at around VND11-14 million per square metre ($520-$660) is viewed as too costly, if state incentives are factored in.

Under Resolution 18/NQ-CP dated April 20, 2009 housing projects catered to low-paid people are subject to land rent exemption. Besides, developers can take preferential loans from Vietnam Development Bank. Developer profit rates are also controlled at no more than 10 per cent. Thus, the proposed $520-$660 per square metre is considered beyond the budget of low-income people.

For instance, an apartment at Ha Dong CT1-CT2 project from Vinaconex Xuan Mai fetches around VND13 million ($620) per square metre, tantamount to around VND1 billion ($47,600) for an apartment with area ranging from 60 to 90sqm.

MoC inspectors said checks of housing projects for low-paid people and students would take place not only in Hanoi but also in Ho Chi Minh City and some other locations such as Thai Nguyen, Haiphong and Hai Duong.

Six housing projects for low income people under inspection in  Hanoi:
- CT1 Ngo Thi Nhan developed by Vinaconex Xuan Mai
- Kien Hung housing project (Ha Dong district) developed by a Vinaconex Xuan Mai-Vinaconex 21 joint venture
- A low-end housing complex in Dang Xa urban area
- Dai Mo low-end housing project developed by Viglacera Corporation
- Two other low-end housing projects in Long Bien district’s Sai Dong developed by Hanoi   Housing Development and Investment Corporation (Handico)