Housing Development: Quick, Strong and Synchronous Solutions Needed

23 Feb
VNRE – The situation of the Vietnam real estate market is unpredictable and most people cannot afford to buy. According to statistics, for the last twenty years, land prices have risen by over 100 times, which makes a house price 25 times the average annual income, 5 times higher than in developed countries and 10 times higher than in under-developed countries. Consequently, the housing demand of low-income people becomes more and more difficult to satisfy.

Pushing up the development of social houses
According to the housing data of the Ministry of Construction in 2009, there were 4,750 homeless people in the city and 7,987 in rural areas. Furthermore, the family and housing survey data of the General Statistics Office also revealed that there were about 1.6 million temporary accommodations, 0.5 million flats of less than 15 sq.m in the city and 1.5 million temporary houses in rural areas.
Additionally, the Ministry of Construction also stated that the 5.8 million low-income people in urban areas needed approximately 70 million sq.m of housing; by 2020, it is estimated that these figures would grow to 6.5 million of people and 117 million sq.m of housing. So, the housing demand of low-income people is truly real. However, not all of them can afford an apartment with their current net income.
In Vietnam, house prices seem to have no relation with average incomes, according to many observers and experts. In accordance with Prof Dr Dang Hung Vo, Deputy Minister of of Natural Resources and Environment, for a long time, real estate project investors have been misled by speculators, so they tended to invest in luxurious real estate projects with the expectation of high profit.
A simple calculation shows that in order to buy an apartment, an average employee would have to save 30 percent of their income for 75 years. As a result, most employees can only start to think of owing an apartment when they get old.
Right after the new lunar year, Mr Trinh Dinh Dung, Minister of Construction, delivered a message of hope for the poor. He said that social housing needed to be developed despite economic difficulties in 2012 and the following years.
The Ministry and construction sector hope that the plan for housing development will be approved by authorities, enterprises and the public. In comparison with private real estate projects, developing social houses and houses for the poor is much more difficult.
The Ministry of Construction will make every effort, completing committed tasks and applying policies to make social housing more widely available and to satisfy people who need dwellings.
State support needed
Regarding the national housing development strategy to 2020 and a vision to 2030, many experts said that the strategy was standing stably on two feet: by the market for wealthy people and by the State’s support for the poor. It has brought hopes of home ownership to low income people and the poor.
The State has policies pushing the housing market, and at the same time expands house supporting policies for socially preferential projects, low income people and poor people who have difficulty getting housing. The policies help stabilise politics, ensure social security and contribute to the modernization of both urban and rural areas.
The strategy has built up very detailed targets for the next 5 years: striving to build at least 10 million sq.m of social houses, including houses for low income people in urban areas; supporting about 400 thousand poor families in rural areas to improve their housing, reducing the ratio of slum housing to under 5 percent; and raising the number of houses for rent to 20 percent of total housing stock, to serve low income people.
For the next 5 years, it aims to build 12.5 million sq.m of social housing in urban areas and to support 500,000 rural poor people to improve their houses, ending slum housing; and will ensure that the ratio of houses for rent will reach at least 30 percent of housing stock.
According to Prof Dr Dang Hung Vo, the program will make the home ownership dream of low income and poor people become reality sooner.
Minister Trinh Dinh Dung noted that housing development is a long term strategy which cannot be completed in just one day. For example, building a house takes at least several months or even years. It is generally difficult to have something completed in just one year. However, people have the right to believe in the housing development targets of the strategy. According to the strategy, real estate investors have to not only develop commercial houses, but also focus on social housing. Investors are bound to get involved, not because of administrative obligations, but because of economic relations.
Reported by Luong Tuan | VCCI News
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