Illustrative image (Source: nld.com.vn)

Hanoi (VNA) -Vietnam should draft policies to encourage the development of affordable rental housing in an effort to resolve the severe shortage of housing for low-income earners, experts said.

Affordable rental housing projects, in fact, could be counted on the fingers of one hand, and could meet only a modest part of the demand. Applications for renting these apartments always outnumbered the available rental apartments.

Vu Thi Lan Anh, deputy general director of CEO Group, was quoted by Kinh Te Do Thi online newspaper as saying that only 86 apartments of the group’s Bamboo Garden social housing project are to be leased out at the intended price of 48,000 VND (2.2 USD) per square metre per month. But the number of applications for renting homes is several times higher.

According to Nguyen Tran Nam, chairman of the Vietnam Real Estate Association, this proves that there is a thirst for affordable rental apartments. However, due to the slow capital recovery and lack of incentives few developers are showing an interest, Nam said.

Property expert Dang Hung Vo said that affordable rental housing development has become critical for Vietnam as many low-income earners cannot afford a house even with preferential loans and many are not eligible for banking loans. Policies should be raised to encourage developers, he added.

According to the Vietnam Federation of Civil Engineering Associations, in developed countries, rented homes often accounted for more than 40 percent. In Vietnam, people generally preferred to own a home rather than live on rent.

Economic expert Ngo Tri Long said that developing social rental housing projects would contribute to changing the Vietnamese habit of owning a house. Long said that clear legal framework coupled with responsibilities of renters to be specified is needed to encourage property developers to invest in this segment.

Experts said that land is one of the biggest problems in developing affordable rental housing projects, given the limited land resources in urban areas.

According to the Ministry of Construction, by 2020, Vietnam will need around 1 million apartments for low-income earners but the current supply is only at around 10,000 units per year.-VNA