The Ministry of Construction has worked out a draft national strategy for housing development, which aims to increase the average housing floor space per capita from current 16.7 square metres to 25sqm by 2020.
The draft also sets a target of increasing the percentage of apartments for lease in urban areas until 2020 up from 14 to 25 per cent. The percentage of affordable priced apartments for low-income earners will be around 10-15 per cent.
Vice construction minister Nguyen Tran Nam said the country’s population was expected to reach 100 million people by 2020, meaning that more than one billion square metres of housing accommodation would have to be built over the next ten years in order to realise the national housing strategy.
Nam said the country’s current housing floor space was totalled at around 1.5 billion square metres, but a lot of people were still living in dilapidated houses.
“Therefore, there is still huge demand for quality housing accommodation in Vietnam, and opportunities are abundant for developers in this sector,” Nam told real estate developers at a spring meeting in Hanoi last week.
He said the housing market this year would be tough for developers as the government’s monetary tightening would limit credit to real estate sector, but he is “very optimistic” about the medium and long-term outlook.
“Housing transactions have slowed down recently and many people are talking about a saturated market,” he said. “However, I do not think there’s an oversupply of apartments because demand for quality housing accommodation is huge.”
Nam said there was an imbalance in the housing development at the moment because most developers had focused on high-end segment, which was just a niche market catering to a small number of people, and those who could buy had purchase already.
“Real estate developers should now focus on more affordable housing accomodation for mass population,” he said.
He accepted that developers often opted for high-end apartments in downtown areas as land prices were high. “But in the outskirts of big cities, real estate investors should build affordable housing,” he said.
Industry insiders have claimed that a powerful agency was needed to monitor the implementation of the national housing strategy.
Le Chi Hieu, chairman of Thu Duc Housing Development Corporation, said the draft strategy’s high targets were tough as a non-synchronous housing financial system and unclear civil and provincial master plan were obstacles
“Housing and real estate market management development was under the management of the Ministry of Construction for a long time whilst beside this ministry, solving all the housing problems needs more hands from the ministries of Finance, Natural Resources and Environment, and Planning and Investment. It’s the time to change,” said Hieu
Developers said that finding enough capital sources to build up houses in current gloomy macroeconomic picture with government’s monetary tightening policies was difficult.
Nguyen Van Duc, director of Dat Lanh Real Estate Company, said housing development was the government’s responsibility, so it was a must to set up a committee to help developers clear land and hand them over to private firms for housing development.
“The government should do first and property developers will follow,” said Duc.
Nam said the government had established a central steering committee with representatives from relevant ministries for a housing development policy under the leadership of Deputy Prime Minister Hoang Trung Hai.
Nam revealed the construction ministry might be renamed and that the new name would contain the term ‘housing’.
Nam said that in the near future, all the current laws relevant to housing development would be adjusted to create a good conditions for realty firms to develop their projects.
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