Housing must target low-income earners
HCM CITY (VNS)—The Ministry of Construction has asked the Government to allow the construction of apartments of no more than 25 square metres in order to jumpstart the sluggish real-estate market and provide standard accommodations for low-income earners.
Construction Minister Trinh Dinh Dung met recently with representatives from property companies to discuss solutions for of the real estate market.
He noted that weak management and planning, as well as inexperienced builders and the presence of far too many speculators had all contributed to the downturn in the property market.
"There are too many luxury apartments and few budget accommodations, which has led to an imbalance in supply and demand," Dung was quoted as saying in the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.
In addition, most capital for the market comes from bank loans with high interest rates. Tightening of the money supply and credit has led to fewer loans as well.
Dung said that companies should try to prepare for the future because more difficulties were expected.
The ministry plans to review the property market nationwide, especially in Ha Noi and HCM City, and will issue new policies for each market.
Le Chi Hieu, chairman of the management board of Thu Duc House Joint-Stock company, said the Government should ease financial supply with long-term loans and low interest rates to help save the market.
On October 20, the Construction Ministry signed a cooperation action plan with HCM City on housing strategy to 2020 with a vision to 2030.
Under the plan, for the 2012-15 period, the city will build a total of 2.7 million square metres for low-income earners.
The total amount includes 600,000sq.m for 100,000 students, 800,000sq.m for 93,000 workers, and 1.3 million square metre or 17,500 apartments for civil servants.
The plan calls for upgrading 25 old apartment buildings, with a total area of 350,000 square metres or 6,500 apartments. —VNS