Property market must shift towards low-cost housing: Construction Ministry

The Ministry of Construction has proposed reforming administrative procedures to create favourable conditions for the development of low-cost, compact social and commercial housing.-Photo vnmedia

This is one of the solutions suggested in the ministry’s latest report, submitted to the National Assembly ahead of its May session starting on May 20.

The ministry also asked the Prime Minister and the Standing Committee of the National Assembly to consider adding public investment capital to boost development of social housing.

The National Assembly and Government should amend and supplement policies on developing social housing projects for workers, the ministry said.

According to the report, under the social housing programme in urban areas nationwide, 198 projects have been completed with more than 81,700 units. Another 226 projects are under construction with a total of about 182,200 units.

Meanwhile, the social housing development programme focused on low-income people in urban areas has completed 98 projects with a total of about 40,700 apartments, reported vneconomy.vn.

About 100 social housing projects for workers in industrial parks have been finished with about 41,000 apartments.

The ministry said the structure of housing products had been adjusted towards low-cost housing but the change had been inadequate to meet demand.

The market has had abundant supply of large, expensive, high-end housing products, but has lacked affordable options that the majority of people in urban areas need, according to the report.

20-30 per cent of the customers in the local market can afford property products priced from VND25 million per sq.m, while 70-80 per cent need affordable or social housing products priced below that threshold. However, supply of low-cost housing has not met demand.

Prices of real estate products, especially housing prices, are not stable.

Since the end of 2016, social housing projects have struggled to secure loans needed to meet their development schedules.

The construction ministry said it was difficulty to secure funding for social housing because the social housing support programme was not on the list of programmes that have priority to use capital from the State budget.

Low-income households had seen their incomes rise, but still struggleed to pay for housing even when they received support from the State.

The report also said local authorities in the provinces of Quang Ninh, Khanh Hoa and Kien Giang had worked hard to stabilise their local property markets.

According to the report, the real estate market has shown stable development in 2018 and the first quarter of this year after several slow years since 2013.