HA NOI (VNS)— Prime Minister Nguyen Tan Dung yesterday called on Ha Noi authorities to put stronger focus on developing social housing during a meeting to assess the frozen real-estate market.
The meeting followed a similar one with HCM City authorities on Tuesday. Both were in preparation for a Government plan to issue a resolution to help the struggling market.
According to reports from real estate companies and trading floors, Ha Noi currently has about 5,800 unsold apartments, equivalent to more than 566,000 square metres of housing space.
In addition, there are about 175,000sq.m in vacant rental offices, but only about 330 unsold apartments left for low-income earners.
Reports suggest that Ha Noi only holds 13 per cent of bank bad credit nationwide in real estate. In comparison, banks have loaned VND85 trillion (US$4 billion) to real estate projects in HCM City, including VND4 trillion ($192 million) chalked up as bad debt.
According to the chairman of the Ha Noi's Peoples Committee, Nguyen The Thao, the frozen property market has resulted from "hot bubble" development and reduced purchasing power due to a weakening economy.
In addition, the market has been affected by speculators focusing only on the high-price segment of the housing market. Other problems relate to credit and financial policies and administrative procedures.
Construction Minister Trinh Dinh Dung noted that Ha Noi's real-estate market was different than HCM City in the sense that it slowed down much later.
There were also a lower number of delayed projects and less outstanding loans as most funds were mobilised from buyers.
The PM said Ha Noi must re-assess planning work and focus on developing the housing market, especially for low-income earners, such as workers, students and office workers.
The PM asked the city to make administrative reforms and increase inspections to find if laws and regulations on land, investment, housing development and real-estate businesses are met.
And, he added, the capital city has to also make sure that information on property activities is kept transparent. — VNS