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Government looks to boost social housing

Update: December, 18/2012 - 10:28


Apartments for low-income earners in Ha Noi's Gia Lam district. Such social housing projects should be affordable for people on low salaries. — VNA/VNS Photo Tuan Anh
HA NOI (VNS)— Social housing developers urged the Government to lower housing prices to make decent life more affordable for low-income citizens.

Specific suggestions included decreasing the minimal area of flats, providing investors with "clean" sites [where investors would not be responsible for land clearance] and proper basic infrastructure, exempting them from land-use tax and value-added tax and offering soft loans.

At present, each square meter in a social housing project costs VND10.6 million to VND13 million (US$ 504 – $620). Eligible customers are allowed to pay in installments, but many of them have returned booked houses, claiming they "cannot afford" them.

Meanwhile, social housing projects seem to have become less competitive in the last few months. In the gloomy domestic housing market, some commercial housing developers in Ha Noi have reduced housing prices and even offered to sell houses and apartments for VND10 million ($476) per square metre.

Deputy Director of the city's Construction Department Nguyen Quoc Tuan said that it would be difficult to lower the price of social housing because social housing developers had the same input costs as commercial housing developers, except that they were exempt from land use fees.

Social housing investors were allowed to collect profits (albeit amounting to less than 10 per cent of the project value), but they also had to deal with bottlenecks in clearing sites and insufficient infrastructure.

As demand for social housing in the city would continue to grow, creating preferential policies would help attract more investors to meet the surging demand, he said.

The department recommended broadening the group eligible to apply for social housing so that households with 10sq.m per person could have access to social housing. Current regulations require social housing beneficiaries to have no more than 5sq.m per person .

In addition, beneficiaries should be able to sell their apartments after five years instead of ten years as currently regulated.

"It's time for investors to offer housing prices more suitable to the poor," said municipal People's Committee vice chaiman Nguyen Van Khoi, adding that developers could invest in new technology and improve management capabilities to reduce costs.

According to representatives from the Ha Noi Construction Joint Stock Company No3, certain social housing projects have failed to progress as planned. In many cases, customers have signed contracts to buy houses or apartments but delayed paying, resulting in a high number of unsold apartments. Other companies find themselves in the same boat.

Yet deputy director of the Ha Noi Housing Development and Investment Company No 5 Nguyen Quoc Chung expressed optimism about the competitiveness of social housing despite the declining prices for commercial housing.

He said that commercially-built houses or apartments now cost VND18-20 million ($857-952) per square metre, more than social housing.

Moreover, the vice director said, the Government's supervision of social housing projects could reassure customers. And if the minimal area specified for an apartment was reduced, social housing would be more competitive. — VNS

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