The Ministry of Construction has asked Hanoi and HCM City to formulate policies that promote social housing development amid a rising demand from citizens for products in this segment (Photo: vietstock.vn)

Hanoi (VNA) - The Ministry of Construction has asked Hanoi and Ho Chi Minh City to formulate policies that promote social housing development amid a rising demand from citizens for products in this segment.

Although the ministry said the property market was exhibiting stable growth, unbalanced developments in supply of high-end apartments and demand of social housing apartments existed as a fear. The ministry forecast that the market might see a glut in high-end apartments and a shortage in housing for low-income earners.

In Hanoi and HCM City, the ministry urged that housing development planning be hastened as a base for investment decisions of housing projects to ensure adequate supply following the market demand and prevent unbalanced market development.

“The two major cities needed to pay special attention and raise policies for social housing developments,” the ministry said.

According to the ministry’s Housing and Real Estate Management Department, successful transactions had slowed down last month.

Initial figures reported by the developers and trading floors in July, saw 1,250 successful transactions in Hanoi, declining by 3.85 percent over the previous month. In the southern city, there were some 1,200 successful transactions in July, falling by 4 percent.

Meanwhile, the apartment supply continued to rise, mainly in the high-end and medium segments while there was a scarcity of apartments for low-income earners to be released for sale.

According to Tran Ngoc Quang, general secretary of the Vietnam Real Estate Association, rising supply but slowdown in transactions reflected problems in the structure of the supply and demand of the realty market.

The association proposed to the management agencies that they have policies to better control the situation towards market demands, Quang said.

In addition, the State Bank of Vietnam (SBV) and the Ministry of Construction needed to pay attention to the credit for the property market together with policies to encourage investment in housing projects for low-income earners, the association said.

With an anticipated oversupply of luxury apartments and a shortage of housing for low-income earners, the construction ministry proposed to the SBV to closely watch the credit flow into luxury property projects and tighten the management of loans to prevent bad debts from rising.

At the end of the second quarter of this year, total outstanding loans in the property business had hit more than 425 trillion VND (19 billion USD), rising by nearly 36 percent from the end of 2014 and 8.2 percent from the end of 2015, according to statistics of the central bank.

Bad debts in the property sector accounted for 3.7 percent of the sector’s total outstanding loans.-VNA