Construction of the Thang Long Green City housing project started on October 14 the outskirt of Hanoi as a joint venture of the Hanoi Housing Development and Investment Corporation (Handico) and the Viglacera Corporation. (Photo: VNA)

Hanoi (VNS/VNA) – Hanoi’s property market will have more supply of social housing products for low-income people by 2020 in order to address the paucity of those products on the market combined with the over-supply of commercial houses.

Construction of the Thang Long Green City housing project started on October 14 in Kim Chung new urban area, Dong Anh district, Hanoi as a joint venture of the Hanoi Housing Development and Investment Corporation (Handico) and the Viglacera Corporation.

The Thang Long Green City with a total investment of 1.3 trillion VND (55.58 million USD) is expected to be completed by 2020, supplying 1,588 apartments for the market, meeting the demands of about 5,330 people.

This product is expected to have selling price of 12.6 million VND per square metre and rent at 50,000 VND per square metre per month.

In addition, Hanoi has some social housing projects under construction, including the Kien Hung - Ha Dong social housing project with 432 apartments and the AZ Thang Long social and commercial service complex in Lai Xa village, Kim Chung commune, Hoai Duc district with nearly 1,500 apartments.

As the city faces a shortage of apartments for low-income people, including workers, those projects are expected to add supply to the social housing fund of Hanoi, contributing to the social security of the capital city. This is also a part of the Government’s housing development strategy by 2020 and vision to 2030 as well as the city’s housing development plan during 2016-20.

According to those plans, the country needs accommodation for three million workers, low-income people and people with meritorious services to the revolution, including one million people in Hanoi.

However, since the 30 trillion VND housing stimulus package ended in 2016, the development of social housing projects in the country, including Hanoi, has been slowing down and some of the projects have had to shut down due to a lack of funds.

Hanoi now has nine social housing projects selling and leasing apartments while 25 projects are under construction and are expected to be complete by 2020. These projects are located in the districts of Thanh Xuan, Hoang Mai, Ha Dong, Nam Tu Liem, Long Bien, Gia Lam, Thanh Tri, Dong Anh, Me Linh and Hoai Duc, reported the Thoi bao Tai chinh Vietnam (Vietnam Financial Times) newspaper.

The nine social housing projects have not met the demands of the low-income people in the capital city.

Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Brokerage Association, said investment in social housing projects was not the first choice of many businesses, because the businesses could not gain many profits from these projects like commercial housing projects.

In addition, the social housing projects receive land tax incentives but those bring limits on the sale price and profit while the prices of construction materials and labour are not reduced, he said.

According to the Ministry of Construction, in the first half of this year, the programme of social housing development for low-income people in urban areas has completed 86 projects supplying about 34,700 apartments for the market. Meanwhile, the social housing development programme for industrial park workers has had 100 projects finishing construction with about 41,000 apartments. However, this supply has only partly met the demand for social housing in the domestic market.-VNS/VNA