On August 9, 2013, Deputy Prime Minister Hoang Trung Hai chaired the 11th meeting of the Central Steering Committee for the policies on housing and real estate market in Vietnam. At the meeting, Deputy Prime Minister asked the ministries and departments to quickly implement and synchronize all housing programmes to meet the demand for social housing needs today.
Affordable housing is increasingly “warmed” up
According to the report of the Ministry of Construction, now there are 34 social housing projects with nearly completed 19,000 apartments for low-income people at total investment of VND5,920 billion. Currently, there are 32 projects in the process of implementation, with about 19,550 completed apartments for the market and 62 social housing projects with 12,500 apartments for workers at a total investment of VND2,800 billion. By the end of July 2013, there had been 50 registered projects, with total 34,000 apartments at a total investment of VND20 trillion, transformed from commercial to social housing.
Projects with small apartment sizes have more transactions because they attract more customers’ interests. In addition, the active supports from the commercial banks include lower lending rates for homebuyers. Besides, the investors are now gaining more confidence in the future of the real estate market, the real estate firms also tend to reduce the area of the apartments to smaller areas and transform from commercial houses to social housing in order to meet the needs of the people.
At the meeting, all the invited guests share the same opinion that at the present, the inventory of the property market is very large, while trading in the segments of the luxury apartments, low-rise building and the land is low. As of June, the value of the real estate inventory accounts for about VND108,773 billion, down 15.4 percent compared to the first quarter of 2013. In particular, Hanoi still has, in stock, 9,651 houses and apartments and Ho Chi Minh City has nearly 13,000 apartments and houses. According to the calculations by the banks, as of the beginning of May 6 2013, the total outstanding loans in the real estate sector was VND237,509 billion, up 4 percent compared to the end of 2012, in which the non-performing loan ratio was 6.53 percent.
Against this situation, Deputy Prime Minister Hoang Trung Hai said that the Steering Committee should continue focusing on solving existing problems and difficulties of the current real estate market. In particular, there should be a special attention to issues such as a large amount of inventory with difficult consumption. A series of business projects for transformation from commercial to residential social housing aim to meet the actual needs of the society. However, this transformation has not been achieved and many apartments have not sold out.
Deputy Prime Minister Hoang Trung Hai also asked the Steering Committee to continue the policy, market-oriented real estate towards diversification of supply sources and types of apartments to meet the needs of the market, particularly in the rental housing, social housing and houses for low-income people.
In terms of the legal documents, Deputy Prime Minister Hoang Trung Hai said that the ministries and departments should focus on improvement of legislation, master plans and objectives of the project. The Ministry of Construction, the State Bank of Vietnam and other provinces should review each project to propose solutions for investors and homebuyers. Deputy Prime Minister Hoang Trung Hai also asked the bank to accelerate the disbursement of loans for target borrowers of the VND30 trillion of credit package, review procedure and appraisal for project owners who need to restructure their apartments and transform the projects for the purposes of social housing.
Deputy Prime Minister Hai directed the Ministry of Construction to resolve problems in the implementation of the Government’s Resolution No.02. It is necessary to consider, guide, and review the implementation monthly remove difficulties for the real estate market”, Deputy Prime Minister Hoang Trung Hai stressed.