Ministry warns about illegal trading of social housing projects amid limited supply
Ministry warns about illegal trading of social housing projects amid limited supply
The Ministry of Construction has warned about illegal trading of social housing projects amid a scarcity of affordable homes nationwide.
The ministry’s statistics showed that only three new social housing projects with a total of more than 1,700 units in Da Nang, Thanh Hoa and Lang Son were granted licences in the second quarter of this year.
There were 94 social housing projects with more than 123,000 apartment units being implemented across the country together with two projects with 264 units nearing completion and five off-the-plan projects with 1,855 units.
Despite huge market demand, the supply was limited as developers were hesitant to invest in this segment due to low profits and not very attractive incentive policies, Nguyen Van Dinh, Deputy President of the Viet Nam Association of Realtors, said.
The ministry urged localities, especially Ha Noi and HCM City, to pay attention to reports that several real estate agencies were advertising social apartment units and had taken deposits, even though the projects were not eligible for sale.
For example, some real estate agencies advertised NHS Trung Van social housing project in Trung Van Ward, Nam Tu Liem District, Ha Noi, at prices of around VND17-17.5 million per square metre, together with a sum of up to VND330 million if buyers wished to choose the apartments.
The agencies collected deposits from homebuyers to reserve slots for purchasing an apartment while NHS Trung Van was not eligible for selling off-plan apartments. The project developer said that it had not put the project up for sale and was still completing legal documents for the projects.
The same situation was also happening to a social housing project on Nguyen Xien Street, Ha Noi.
Previously, the Ministry of Construction asked Ha Noi to tackle brokers collecting informal sums worth hundreds of millions of dong for each apartment in two social housing projects in Bac Tu Liem and Thanh Xuan districts.
This problem was due to a severe shortage of social housing projects while market demand was high.
The ministry’s statistics showed that to date only 5.1 million sq.m of social housing space had been completed, meeting only 41 per cent of demand.
In addition, some social housing projects were attractive to buyers because they were located in good positions with reasonable prices, promising a good investment even when buyers had to pay more to sign up.
Several social housing projects which have already been put into use saw prices more than double, for example in Linh Dam Urban Area, Hoang Mai District, Ha Noi.
According to Bui Van Doanh, Director of Real Estate Training and Research Institute, said that social housing projects were meant to be developed for low-income earners but it seemed to be difficult for those buyers because of limited supply and high informal charges.
Le Hoang Chau, president of HCM City Real Estate Association, said that the real estate market was seeing an imbalance in supply and demand with an excess of high-end products and a shortage of affordable homes. It was necessary to develop comprehensive solutions in terms of planning, land, social housing projects and affordable homes to stimulate the market development.
The Ministry of Construction asked localities to focus on increasing the supply of affordable homes for low-income earners and workers in industrial zones while adjusting the housing structure to meet market demand. In addition, administrative procedures for carrying out real estate projects would be simplified to speed up progress.
Market transparency must be enhanced, including information about planning, project legality, progress and infrastructure development, to prevent speculation.
