State to encourage construction of cheap apartments

Social housing projects in Dong Anh district, Hanoi, for workers in Thang Long Industrial Park (Photo: VNA)

The Ministry of Construction made the announcement at a seminar on solutions on restoring the domestic real estate market in the post-COVID-19 period. This event was held by the Vietnam Real Estate Association and Xay Dung (Construction) newspaper in Hanoi on June 12.

The Government recently issued a resolution on providing more capital for social housing development and assigned the Ministry of Construction to work with localities to review social housing projects and housing projects for workers at industrial zones nationwide.

The ministry has also proposed the Government amend Decree 100 on social housing development and management to cut administrative procedures to help businesses invest in this segment, according to Deputy Minister of Construction Nguyen Van Sinh who attended the seminar.

In addition, to develop housing projects for low-income people, the ministry has also built a draft of a resolution on developing low-price commercial houses. At present, the supply of middle and high-end houses is higher than that of low-price houses, prompting the need for the Government to intervene.

For instance, the State will increase incentives for businesses investing in commercial apartments with an area of under 75 sq.m per each and an offered price of less than 20 million VND (over 858 USD) per sq.m.

This draft of the resolution is expected to be submitted to the Government in the third quarter of this year, according to the Construction Ministry.

In the long-term, the ministry must review overlapping regulations relating to real estate investment and business activities and amend them to create good conditions and clear administrative procedures for investors.

As part of that, the ministry is amending the Housing Law and the Real Estate Business Law as well as decrees and circulars to ensure the consistency and reform of administrative procedures.

"In addition, the ministry needs to improve institutions relating to real estate and have a strategic plan for property market management," said expert Can Van Luc.

Expert Le Xuan Nghia said the quick or slow recovery of the real estate market will depend on the recovery of the economy and policies of the Government.

Basic segments such as industrial real estate, affordable housing, land plots, luxury apartments and shophouses might recover soon, while office and resort real estate might recover more slowly.

The Government's current stimulus packages have had a positive impact on the real estate market. Besides that, there are policies on infrastructure development, key economic zones, industrial parks and reform of administrative procedures and adjustment of laws.

However, the property market still needs solutions in regulations and administrative procedures on auctions for public land and leased land, site clearance and change of land use purpose. Those solutions will simplify procedures and keep the stability of those regulations for several years, Nghia said.

In the first quarter, large investors with financial ability continued with their projects, of which 56 projects with more than 20,000 apartments were under construction and 55 projects with 18,000 units were completed.

Suspended businesses in the property sector increased 94.1 percent year-on-year while 80 percent of property trading floors nationwide were suspended.

Meanwhile, the property sector attracted only 264 million USD of foreign direct investment (FDI), accounting for 3.08 percent of total national FDI in the first quarter of this year.