VNREA pushes for low-cost housing policy

The Việt Nam Real Estate Association (VNREA) has again proposed that the government formulate policies for developing small, inexpensive apartments smaller than 75sq m and cheaper than VNĐ15 million per sq m.- Photo cafef.vn

At its annual meeting held in the central Bình Định Province last week, the VNREA drew up five proposals to be submitted to the government.

The association has proposed the reduction of value-added and corporate income tax for cheap housing projects, and has recommended that such projects get preference for land funds and bank loans.

VNREA’s chairman Nguyễn Trần Nam said the market still faces risks such as unbalanced goods structure, meaning, the demand from a majority of the population is for mid- and low-cost houses, while most projects in the market are high-end.

“The market lacks products that suit the finances of the majority. The two big cities of Hà Nội and HCM City have only a small number of new apartments priced under VNĐ20 million per sq m,” Nam said.

Projects, especially in large cities, are not coming up based on demand in specific localities. The development of social housing projects has been slow as capital and policies are not in sync with market reality.

The VNĐ30 trillion housing stimulus package, launched in 2014, supported low-income buyers, and people were given a preferential interest rate of 5 per cent for within 15 years. However, after the package period got over, no new credit policies have been introduced to encourage cheap apartment projects, said Phạm Sỹ Liêm, former deputy minister of construction. “The government should focus on credit for the development of low-cost housing projects. Developers selling apartments for VNĐ10-15 million per sq m should get access to preferential loans,” he said.

Liêm pointed out that many countries have such policies in place to encourage low-cost housing projects.

Last November, the association made a similar proposal to the National Assembly on the local real estate market after it met in October.

The VNREA has also asked local authorities to determine the ratio of social, commercial and high-end housing projects, to balance the real estate demand. Based on real demand, localities should make decisions on granting land and construction.

The association has also suggested a collaboration between the ministries and the State Bank of Việt Nam to fix suitable credit resources and avoid concentration on only certain market segments.