HA NOI (VNS) — The Government is encouraging private enterprises to provide affordable housing, stated Construction Minister Trinh Dinh Dung.
While fielding questions from the public on television on Sunday, the minister noted that the government was no longer offering subsidies for housing projects.
Earlier, the Government had funded the construction of public housing and provided free accommodation to qualified people, including state employees.
"Now, instead, the Government has developed policies and mechanisms to encourage enterprises, both public and private, to invest in affordable housing," Dung pointed out.
Low income earners, or those who faced difficulties in affording houses, can buy or rent houses at cheaper prices as compared to market prices because the government has reduced land use fees, VAT tax, and offered preferential loans to the investors of such housing projects.
Affordable housing development was a key component of the National Housing Strategy, which was launched in 2011, he claimed, adding that the revised Constitution regulated that the Government had to adopt policies to help people have access to housing, which is one of the key factors to ensure human rights.
The strategy is targeted to balance the development of both commercial housing for high-end and affordable housing for low income earners and the poor, Dung reported.
The overdevelopment of commercial housing in the last few years has resulted in a contradiction wherein some owned abundant houses, while a majority of people, including workers and employees, did not have a house to live or were living in improper conditions.
As a move to help address the housing shortage and revive the domestic gloomy property market, last June, the Government unveiled the VND30 trillion (US$1.43 billion) housing loan package. As of April 15, only some 5.6 per cent of the package was disbursed.
Last month, the Ministry of Construction proposed that the Government stop granting licences for commercial housing projects this year. Some experts complained that the move was against market rules.
Dung responded that since long, the government let the property market run without its proper intervention, thereby causing a surplus in the high-end segment and shortage in the low-cost housing segment.
Presently, there are over 4,000 approved housing projects requiring about 102,000 hectares and VND 4,500 trillion to build nearly three million apartments.
Dung reiterated that Viet Nam was not in a position to afford such an investment.
In HCM City and Ha Noi, the work on nearly 800 approved projects was stopped.
"So, we don't need to grant licences to new commercial housing projects at this point in time," Dung stated, adding that the proposal was applicable only for this year," — VNS