Serious shortage of affordable housing
Sharing with Lao Dong reporters, representatives of the Ho Chi Minh City Real Estate Association (HoREA), the housing market in urban areas is seriously lacking commercial housing at prices suitable for the income of the majority of people. Therefore, the issuance of a Resolution piloting the development of affordable commercial housing is necessary to supplement supply for this segment.
HoREA believes that "cheap houses" on the market today include two main types: social housing and affordable commercial housing. In which, social housing is usually priced about 15-20% lower than commercial housing of the same type thanks to land use fee exemption, tax reduction and infrastructure support.
However, the supply of social housing is still very limited. According to data from the Ministry of Construction, in the period 2021-2025, the whole country has only completed 196 projects with about 170,129 social housing units, equivalent to 17% of the development target of at least 1 million units in the period 2021 - 2030.
Even when the development progress has improved recently, HoREA believes that this supply is still difficult to meet the housing needs of tens of millions of people in urban areas.
In addition, many people with average income in urban areas - about 21 - 35 million VND/month for individuals or 41 - 55 million VND/month for couples - are not eligible to buy social housing, but are also unable to afford to buy high-priced commercial housing.
Meanwhile, the real estate market is currently completely lacking commercial housing products at reasonable prices. HoREA said that this type of apartment usually has an area of about 50 - 70m2, priced at about 30 - 70 million VND/m2, equivalent to 2 - 5 billion VND per unit.
Social housing land should not be converted into commercial housing at reasonable prices
HoREA believes that the draft resolution has proposed many mechanisms suitable to reality, such as policies on planning, construction investment and mechanisms for determining house selling prices.
However, the association proposed not to allow the use of land reserved for building social housing to develop affordable commercial housing.
According to HoREA, if this regulation is applied, investors can convert land funds for social housing to build commercial housing at reasonable prices to achieve higher profits. This may lead to a shortage of land funds for social housing development and affect the goal of building at least 1 million social housing units in the period 2021 - 2030.
HoREA also proposed that commercial housing projects with reasonable prices must still allocate land funds for social housing development, in order to ensure consistency with the provisions of the 2023 Housing Law.
Proposal for housing loan interest rates of about 6 - 7%/year
To support the development of this housing segment, HoREA proposes a credit mechanism with reasonable interest rates for both investors and homebuyers.
Accordingly, a reasonable commercial interest rate is proposed at about 6–7%/year, with a loan term of about 5 years for investors and 10–12 years for homebuyers or lease-purchasers.
The Association also proposed to allow investors and buyers of commercial housing at reasonable prices to access the 145,000 billion VND commercial credit package voluntarily participated by commercial banks.
In addition, HoREA proposes not to include outstanding loans for commercial housing at reasonable prices in the annual credit growth ceiling of credit institutions, in order to encourage banks to participate in providing capital for this segment.
Proposal to assign localities to decide ceiling prices
HoREA also proposes to decentralize to the Provincial People's Council to decide on the ceiling selling price and lease-purchase price of commercial housing at appropriate prices to suit the actual conditions of each locality.
In addition, the association believes that it is necessary to stipulate that commercial housing buyers at reasonable prices are only allowed to buy one unit and are not allowed to resell it within 5 years from the date of receiving the house handover, in order to limit speculation and ensure policies that serve the right people with real housing needs.
