Illustrative image. Photo: Zing,vn
476,000 households living with parents or relatives and are in need of housing.
The Ho Chi Minh City Department of Construction has recently announced the results of a survey conducted on the status of housing in order to meet demand in the southern city.
More than 476,000 households (accounting for 23.46 per cent) have not had housing or are living with their parents and relatives, the report found.
Some 20,000 households of officials and public servants do not have housing or live with their parents or relatives and about 13,000 households were displaced by the city’s urban restructuring projects.
The city’s People’s Committee recently held a seminar on housing solutions for young people, where market researchers revealed that up to 60 per cent of market demand is from people aged between 25 and 35 years old and most have housing demand over the next three years.
The supply of affordable apartments is limited to low-income buyers, however, so house ownership is relatively problematic.
In order to meet demand, the Department of Construction has proposed local authorities create a social housing fund for selling or renting about 30,000 apartments.
2017 is forecast to be the year when property developers move resources into affordable housing but experts believe the market will remain short of needs.
The affordable housing market will face a number of difficulties. For example, bank credit will decline this year due to limits on mid and long-term financial resources, according to expert Mr. Dinh The Hien.
“Cheap housing under VND1 billion ($45,000) is viewed as a savior for the domestic real estate market in 2017 because of huge demand,” Mr. Hien said. “Most homebuyers must borrow at least 70 per cent of the house’s value, but the VND30 trillion support package from the government has been exhausted and the market is unlikely to see another package.”
In the 2016-2020 period, the city will continue building 39 social housing projects on an area of 140.41 ha with 44,700 units. Eight of the 39 projects are now under construction, with over 4,200 units, 12 other projects have been approved, with nearly 12,000 units, and remaining 19 projects have been approved.
Talking to local media recently, Mr. Le Khac Hiep, Deputy Chairman of Vingroup, confirmed that the group will provide around 300,000 affordable apartments to the market over the next five years.
In the event that liquidity becomes problematic due to the absence of a preferential credit package, developers will study private support packages for customers, Mr. Hiep said.
As recommended by experts, people taking out loans to buy housing should note interest rates, because in the coming one or two years they will be adjusted to about 3.5 per cent per annum on minimum terms of 20 years. Borrowers should have a repayment plan, to be secure when deciding to buy a house.