HANOI: Hung Thinh Group has said that from this year it will collaborate with Dong Tam Group and Truong Thanh Furniture Corporation to develop affordable housing in several provinces and cities, including Ho CM City and Long An, Bình Duong and Dong Nai.

       The joint venture will build quality houses and sell them at prices affordable to low-and medium-income people.

       A spokesperson for Hung Thinh said the projects would supply 100,000 apartments to the Ho Chi Minh (HCM) City market at an average price of around 25 million dong (RM4,617) per square metre, while in other localities they would cost 20 million dong (RM3,693).

       A joint venture between the Nam Long Group and Japan’s Nishi Nippon Railroad is also developing a low-cost housing project in Long An Province, Ehome Southgate, that will provide the market with around 1,400 apartments this year.

       Another real estate developer, Apec, recently set up a subsidiary (Happy City) with a legal capital of 10 trillion dong (RM1.84bil) that will be involved in the social housing segment.

       It targets building 10 million affordable houses for 40 million people in 2021-2030.

       In the first phase in 2021-25 it will build four million apartments mainly in the countries’ two biggest cities, Hanoi and HCM City.

       Several real estate insiders say the low-cost and social housing markets are likely to start booming this year.

       They say the big players’ return to the low-cost housing market is great news for millions of people since it means many of them will be able to access affordable housing.

       It will also help make the real estate market more vibrant and healthier, especially the apartment segment.

       A serious shortage of low-cost housing has plagued all localities nation-wide for a long time, which has resulted in a steady increase in housing prices and pushing low-and medium-income earners out of the housing market.Statistics from the ministry of construction show there were a total of 1,040 social housing projects in the country last year, including 507 built independently and the rest on the 20% of land commercial housing projects and urban areas designated for social housing.

       Of them 248 with 103,500 apartments are complete, 264 with 216,500 units are under construction and the rest have not started construction or are completing investment procedures.

       The ministry said the 5.1 million square metres of completed social housing would only meet 41.1% of the target set in the national housing development strategy for 2020 with a vision to 2030. Under it, the government had planned to develop 12.5 million square metres by 2020.

       It also said that the number of low-cost housing projects in Hanoi with average prices of 25 million dong (RM4,617) was really small in 2021 and mostly located very far from downtown and with poor infrastructure. Meanwhile, HCM City did not have even one such development.

       Analysts said lack of funding had been one of the biggest hurdles to implementing the social housing development strategy.

       It was estimated that it required around nine trillion dong (RM1.66bil) to be accomplished, but only 2.16 trillion dong (RM398.4mil), or 20%, was provided by the Vietnam Bank for Social Policies. A lack of unencumbered lands had also been a dampener, they said.

       Only some localities had been ready to hand over such lands to developers. Consequently, several companies said they found it very difficult and costly to clear lands and they also had to cope with social and technical infrastructure limitations in the allocated areas. All this meant their profits from these projects were low.

       Thus the question is why they want to return now to the low-cost and social housing segments they have ignored for a long time?

       Analysts say the most important reason for this is the Government’s determination to resolve the difficulties faced in developing social housing and housing for low- and medium-income people as several new recent policies and measures indicate.

       The Government has issued several policies to encourage the development of low-cost housing and help low-and medium-income earners buy housing, which included the 30 trillion dong (RM5.53bil) housing package in 2016 for low-income home buyers at preferential loans or waivers. — Vietnam News/ANN