Top officials from the Ministry of Construction (MoC) said that housing developers had been given priority regarding tax exemption, land use tax breaks, soft loans from banks and a building density increase in order to help them build low-priced apartments.

Deputy Minister of Construction Nguyen Tran Nam said that his ministry, on behalf of the State, has controlled the prices of these housing units while allowing developers to enjoy a average profit of 10 percent, satisfying both businesses and residents.

However, Nam suggested that low-income customers be given incentives to take out loans from banks and use the 10-year-rent-mortgage method in order to help them purchase their own apartments. He said that Vietnam needs to step up research in material technology and interior design in order to create high-quality, affordable apartments.

Currently, MoC has planned to set up a housing savings fund to support low-income people, supplied in part by the State budget in addition to contributions from buyers. The fund is expected to be managed by a not-for-profit company.

Due to tightened monetary policy over the past few months, buyers have begun to withdraw from bids on low-priced apartments. Many people have cancelled their purchasing contracts, stirring concerns over whether the supposedly “affordable” apartments deserved their title.

In response, Nam said bids from buyers have still outnumbered available units.

He maintained that the calculated price of 10 million VND (480 USD) per square metre was totally reasonable, but noted that in small cities such as Da Nang, Hue and Thanh Hoa, prices could drop even lower to about 5-6 million VND (240-288 USD) due to lower land costs and available infrastructure.

MoC is now considering a draft decree that would allow housing developers to build apartments for lease, giving poor families the opportunity to rent in lieu of purchasing.

According to the ministry, around 5 percent of low-income families who were unable to make payment would be given priority to lease under the new decree. /.