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City to target low-income housing investors

Update: August, 24/2012 - 09:41

 

A housing area for workers in Kim Chung Commune in Dong Anh District, Ha Noi, currently under construction. Ha Noi has implemented 14 social housing projects. — VNA/VNS Tuan Anh
HA NOI — Ha Noi's Department of Construction would complete a mechanism and policies on social housing management and development to support enterprises investing in social housing in the city by the end of this year.

The department would also work with relevant authorities to find solutions for slow-moving and poor-quality projects.

The move was designed to help enterprises access bank loans to build low-income houses and tackle low competitiveness in the affordable housing market.

Figures from the department showed that Ha Noi has implemented 14 social housing projects, providing 15,410 apartments for 54,300 low-income earners in the city.

Currently, more than 1,500 low-income apartments are being built and will be put into use in Sai Dong Residential Area in Long Bien District and Kien Hung Residential Area in Ha Dong District by the first quarter of next year.

Director of the department Nguyen The Hung said that a shortage of investment capital was among the huge difficulties facing enterprises that wished to invest in this sector.

Last May, the Bank for Investment and Development of Viet Nam (BIDV) committed to provide a line of credit of VND2 trillion (US$96 million) to support the construction of social housing projects over the next two years. However, so far, only a project in Dang Xa Residential Area has managed to take out a loan with slow disbursement, although investors from seven projects have applied for loans.

Hung said the reason was that enterprises needed to have secure property to access the loan while land for social housing projects was not considered as such.

Moreover, the price of low-income housing remains high, as much as other low-price houses in the market, contributing to slow sales.

Most low-income housing located in suburban areas cost from VND13-14 million ($624-627) per square metre, while the price should be VND2-4 million ($96-192) per square metre. Many nearer the city centre are advertised for between VND14-16 million ($660-760) per square metre.

A shortage of specific policies for low-income earners to access loans to purchase houses was also an issue, Hung said.

Nguyen Manh Kim, a resident of CT1 Ngo Thi Nham Residential Area in Ha Dong District, said that he bought a 61-square metre apartment for low-income earners last April at the price of VND610 million ($29,280).

Each month, he and other households spent more VND90,000 ($4.2) for security and cleaning services and VND25,000 ($1.1) or VND60,000 ($2.8) for parking a bike or motorbike respectively.

"The service cost is high for such a low-income house, but I'm generally satisfied with it as we have a parking garage, a pre-school and a mini-supermarket on the ground floor," he said.

However, he was annoyed that the terms and conditions did not allow owners to sell or transfer their houses in the first ten years.

"We have to wait if we want to move. We can't sell it when we need to," Kim said.

According to Hung, the department has announced the social housing criteria as a reference for enterprises to avoid different price levels.

The city also expanded the beneficiaries, which allowed people with permanent and temporary residencies at district-levels to access the houses.

He said the State should help enterprises to access preferential loans to build social housing, with VAT exemption and premises free from site clearance and other procedural difficulties to provide affordable housing for low-income earners.

Currently, low-income houses are not exempt from VAT. — VNS

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