2017: Waiting for affordable housing

	By the end of 2016, 30,000 billion vnd will be disbursed
	Creating a new flow for investing the low-cost housing
	The Government regulates the amount of registration fees

Many investors have focused on infrastructure, schools, commercial centers and hospitals in the project for affordable housing.

The demand may be met

At the end of 2016, Vingroup announced the construction of affordable housing with a total of approximately 200,000-300,000 apartments with the brand “VinCity” in 7 localities, including Ha Noi, Hung Yen, Hai Phong, Ha Tinh, Thanh Hoa, Nha Trang and HCM City. Notably, the price of each apartment is from only 700 million vnd per unit. Even in some localities such as Ha Tinh, the price of each apartment is only 450 million vnd. Speaking to the press, a representative of Vingroup said that the project of Vingroup included condominiums with 22-25 floors, construction density of 20-25% and apartments had an area of ​​35-90m² with a price of 13-19 million vnd/m². The change of Vingroup to invest in affordable housing has really surprised low-income people as well as bringing positive signs in the field of real estate. This information has created an immediate effect afterwards. Muong Thanh Corporation has also announced that it will launch 3,000 apartments with the price of 10 million vnd/m2 for apartments with an area of ​​50-60 m² in Thanh Ha Cienco 5 project (Ha Dong district, Hanoi). After the big above enterprises started, many other enterprises such as Him Lam Land, Hung Thinh Group, Nam Long Group and Coteccons Group said that they would participate in affordable housing in the near future.

According to experts, the demand for affordable housing and low-cost housing is very high. Along with the positive signs about the supply, affordable housing will be the central segment of the real estate market in 2017. Regarding this information, Mr. Nguyen Ngoc Thanh, the Vice Chairman of the Vietnam Real Estate Association said that this was a good sign for the market. According, consumers will have more choices to own apartments with a low price.

In this regard, Prof. Dang Hung Vo, the Former Deputy Minister of Natural Resources and Environment said that the current supply for affordable housing was short while the demand was very high. According to the World Bank, in Vietnam, the proportion of residents who can buy affordable housing has accounted for 80%, while the supply is only 20%. There is no way that enterprises have to compete each other aggressively in the field of affordable housing because even if the number of affordable housing increases by 5 times now, it cannot meet the demand of residents. Therefore, Vingroup and Muong Thanh Group said that the investment in affordable housing was also beneficial, which showed the social responsibility of enterprises.

Motivation from enterprises needed

The question is that in 2017, can affordable housing be provided for consumers?

According to the published information, Vingroup will provide 200,000-300,000 apartments in the market in the next 5 years. Thus, on average, each year, there will be about 60,000 - 70,000 apartments provided by Vincity. A representative of Vingroup said that Vingroup would promote procedures at the 7 localities in the first half of 2017. These projects will be implemented simultaneously after completion of legal procedures and clearance. Thus, we can see that at the end of 2017, a number of projects of Vingroup will be eligible to open the sale. Reportedly, in Ha Noi, Vingroup has a project in Gia Lam district with an area of ​​nearly 300 hectares and a project in Dan Phuong district with an area of ​​130 hectares. In HCM City, the projects of Vingroup are located in District 7 (20 hectares) and District 9 (approximately 300 hectares). With Muong Thanh Group, a representative of this Group said that Thanh Ha - Cienco 5 project had 9 condominiums with​​nearly 3,000 apartments of 45 - 80m² per apartment, built on an area of ​​about 400 hectares. Currently, the project has been implemented on housing, infrastructure, schools and customers can deposit to buy a house or an apartment from the middle of 2016.

According to real estate experts, the demand of affordable housing is still very high, so the launching of new projects of the two big groups only meets a small part of the market demand. Besides, the profit from affordable housing does not attract investors because they have to face up with difficulties in preferential credit. Therefore, the authorities should create favourable conditions for enterprises to participate in this segment. "In order to encourage and facilitate enterprises in the field of affordable housing, the Government needs to provide more convenient and favourable regulations to help enterprises invest in affordable housing", Mr. Nguyen Van Duc, the Deputy Director of Dat Lanh Real Estate Company proposed. He also said that he repeatedly asked for building affordable housing with the land use, and building density equal to ​​social housing.

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"If the State authorities approve my proposal, it can bring 90% of success for development of affordable housing. For other factors such as support in land use, infrastructure, power supply, water and reduction of VAT, they only bring 10% of success", Mr. Duc analyzed.