The Ministry of Construction proposes solutions to reduce housing prices

The Ministry of Construction will continuously propose solutions to reduce housing prices

Apartment prices increase steadily month by month

Regarding housing prices and some types of real estate, the Ministry of Construction said that although the number of transactions in many types and segments of real estate decreased, transaction prices still increased compared to the fourth quarter of 2020.

Accordingly, in the first quarter of 2021, there were 25,386 successful real estate transactions, only about 86% compared to the fourth quarter of 2020. In general, successful transactions mainly focused on the affordable segment, while the number of high-end residential real estate transactions decreased compared to the previous quarter.

In big cities, affordable apartments (prices below VND25 million/m2) such as social housing projects and cheap housing are only available in areas far from the center. Previously, the price of these kinds of projects was about VND20 million/m2, now it is about VND25 million/m2.

Along with that, apartment prices in localities tend to increase steadily month by month, by 5-10% on average compared to the fourth quarter of 2020. Apartment prices in Hanoi and HCM City both increased due to scarcity of supply and newly launched projects.

According to data published by the Vietnam Real Estate Brokers Association, in Hanoi, compared to the fourth quarter of 2020, the price of apartments did not change much, but compared to the fourth quarter of 2018, the price of affordable apartments increased by 20.9%, the price of mid-end apartments increased by 7.6%, and the price of high-end apartments increased by 0.8%.

In HCM City, the selling price did not change much compared to the end of 2020, because it had been pushed up very high before. Particularly in Thu Duc City, the apartment prices continued to increase, about VND60-70 million/m² on average.

Due to the scarcity of new products, inventory in HCM City is not much and the price is also at a high level. Thus, investment demand continues to move strongly to the neighboring area of Binh Duong, pushing the apartment price there to VND30-35 million/m².

According to the assessment, the supply of affordable housing with suitable prices for the majority of low- and middle-income people has not yet met demand.

The Ministry of Construction said that with a total area of more than 5.2 million m2 of social housing completed up to this point, it has only achieved about 41.7% of the target set out in the National Housing Development Strategy to 2020 (12.5 million m2).

Pulling down housing prices by increasing the supply of affordable houses

Regarding this issue, HCM City voters suggested that the Ministry of Construction should have solutions to reduce housing prices to meet the huge needs of middle-income and urban low-income people, ensuring social security in the long-term, and developing the real estate market in the direction of transparency, health, stability, and sustainability.

Regarding this issue, the Ministry of Construction said, in 2019, the Ministry had been assigned by the Prime Minister to study and propose amendments and supplements to a number of articles of the Law on Housing 2014 on housing support policies for cadres, civil servants, and public employees with housing difficulties, submit to the National Assembly Standing Committee for a decision to add to the Program of the National Assembly for consideration, and approval in 2019.

However, since the Central Organization Committee was also presiding over the development of the "Project on housing policy for cadres, civil servants, and public employees in the political system", to ensure synchronization and consistency in policy research, the Prime Minister agreed with the proposal of the Ministry of Construction on delaying the deadline for submitting proposals for amendments and supplements to the Housing Law after this project had been approved by the Politburo.

In the future, based on the approved contents of the project, the Ministry of Construction will continuously research, develop, and supplement housing policies for cadres, civil servants, and public employees in the process of studying and developing the Law on Housing (amended) according to the law-making program of the National Assembly.

On April 1, 2021, the Government issued Decree No. 49/2021/ND-CP amending and supplementing a number of articles of wDecree No. 100/2015/ND-CP of the Government on development and management of social housing. In which, a number of contents aimed at renovating methods, mechanisms and policies to increase supply will be revised and supplemented, contributing to housing settlement for low-income subjects.

Currently, the Ministry of Construction is coordinating with relevant agencies to research, develop, and submit to the Government policies to encourage the development of low-priced commercial housing projects that are suitable to the affordability of the majority of urban people.

The Ministry of Construction affirmed that, in the future, the Ministry would report to the Government and propose solutions to increase the supply of social housing and low-priced commercial housing, contributing to reducing housing prices to meet the housing needs of the majority of people.