New measure expected to save real estate market

11:12 | 06/04/2013
Vietnam may pilot turning commercial housing into houses for lease as part of efforts to deal with the slump in the real estate market.

An underway social housing project

The Ministry of Construction (MoC) is seeking approval from the government to issue a regulation on the issue.

This solution would be applied along with earlier moves including turning commercial housing into social housing and dividing larger apartments into smaller units to better serve market demand.

According to the ministry, the leased housing market is relatively modest compared to the number of families that own a house. Meanwhile, lessons from several countries showed that developing housing for lease would be an obvious solution.

As a result, the ministry proposed a maxim rent for workers and employees at industrial parks at VND35,000 ($1.7) per square metre per month. Rental fees for housing in urban areas should be VND65,000 ($3.1) per square metre per month.

The ministry suggested piloting the measure at five apartment projects across the country, including Bee Home 1 and Bee Home 2 in HCM City by CT Group; a project to build housing for workers, experts as well as service centre in My Hoa Commune of Vinh Long Province’s Bin Minh District by Hoang Quan Real Estate Services, Trading and Consulting JSC.

A project to build housing and industrial service centre in Tien Son industrial park and a project to build housing for workers at Yen Phong in Bac Ninh Province by Viglacera Corporation should be subject to the piloted measure as well.

To this end, the ministry has proposed that the government create more incentive policies for both investors and renters of such projects.

If approved, people could rent houses for at least one year and get soft loans equivalent to a maximum of 80% of their house rental contract’s value to settle their payments monthly.

Investors of such projects could benefit from a 10% corporate income tax rate, compared to normal 25%, in addition to preferential land use and land lease fees as well as soft loans at banks.

Over the past recent one month, the MoC has taken consecutive detailed measures to support the real estate market with due attention paid to housing for low and medium-income earners.

The ministry is coordinating with Hanoi municipal authorities to set up interdisciplinary working groups to deal with particular projects.

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