Buyers of a social housing project in Nha Trang complete procedures to receive their apartments. (Photo: VNA)
Hanoi (VNS/VNA) - Social housing could be the solution to driving thereal estate market out of this difficult time caused by the COVID-19pandemic, according to the Ministry of Construction.
Directorof the ministry’s Housing and Real Estate Market Management Department Nguyen Trong Ninh said the pandemichad revealed limitations in the real estate market.
Ninh saidthe market was suffering from the impacts of COVID-19, and around 80 percent of brokerage companies had closed. The number of new firms operatingin the real estate sector had dropped by 11.9 percent, while the number offirms that had halted operations in the first quarter was up 94.1 percenton-year.
Theministry said the property market would continue to facedifficulties in the remaining months of this year with declines intransactions and supply.
Thesedifficulties have been caused by the economic slowdown, bottlenecks ingranting licences for new projects, tightened credit for real estate, anddeclines in the services and tourism industries that have taken a hitfrom COVID-19 since the start of the year.
Theministry said that housing prices remained unstable and unaffordable tothe majority of people. At the same time, speculation had significantlyinflated housing prices.
Accordingto Le Hoang Chau, President of the HCM City Real Estate Association, the marketwas quiet in the first quarter and had nearly frozen in April. Transactionsfell by 70 percent and revenue by 80 percent, resulting in exhausted liquidity.
Chau saidthat both property developers and home buyers had fallen into difficultiesdue to COVID-19.
Nguyen Tran Nam, President of theVietnam Real Estate Association, said that focus should be placed on developingsocial housing projects to create an impetus for the market to overcome this difficulttime.
Carefulevaluation of the impacts of the COVID-19 pandemic was needed, especiallyin Hanoi and HCM City, to support the market, Nam said.
At theministry’s meeting late last week to discuss solutions to support the realestate market, experts urged the ministry to ask the Government topostpone land use fee payments, tax reductions for real estate companiesand lower lending interest rates.
Morecapital
TheGovernment has decided to allocate 1 trillion VND (43.1 million USD) forthe Vietnam Bank for Social Policies and 2 trillion VND for four commercialbanks to provide loans for social housing development.
Theseloan packages are expected to help increase capital for social housingdevelopment, after a 30 trillion VND loan package with preferentialrates ended in 2016.
Accordingto Ninh, the ministry was developing criteria for those eligible toborrow money from the package to speed up disbursement. The ministry wouldsubmit proposed amendments to Decree 100/2015/ND-CP about social housingdevelopment and management to the Government for promulgation in the fourthquarter of this year.
Theministry’s statistics showed that within the housing development programme forlow-income earners in urban areas and workers in industrial zones, 207 projectshad been completed with more than 85,000 apartments. Another 220projects with 179,640 apartments are under construction.
However,this was only equivalent to 34.3 percent of the national housingdevelopment programme to 2020, which set a target of 12.5 million sq.m ofnew social housing by the end of this year./.
