Apartment for rent in Vietnam, Experts urge Ha Noi to develop rental housing The shortage of affordable rental housing in Ha Noi will get worse if local authorities do not pay more attention to housing projects, especially for people living in the rural outskirts of the city, experts recommended.
The comments were made at a meeting last week held by the city's Fatherland Front Committee to collect feed-back on the city's proposed Housing Development Programme for the 2012-20 period.
In 2011, the city had nearly 147 million sq.m of housing, and the average housing area for a person in the city was about 21.5sq.m, three square metres more than the average figure for the whole country.
Under the draft, the city aims to raise the average to 23.1sq.m per person by 2015, 26.3sq.m by 2020 and 31.5sq.m by 2030.
At present, rental housing makes up about 14 per cent of the capital city's total housing area.
Property management in Vietnam Vietnam apartment for rent Real estate hanoi Real estate ho chi minh Vietnam real estate market Real estate in vietnam Hanoi real estate Real estate vietnam Apartment for rent in Vietnam Hochiminh real estate Apartment in hochiminhThe city aims to have rental housing projects accounting for 25 per cent of housing projects in the next three years. The target percentage will rise to 30 per cent by 2020.
Former president of the Ha Noi Urban Planning and Development Association Dao Ngoc Nghiem said that rental housing sector needed more investment, especially as the city was a hub of industrial zones, universities and colleges with huge demand for rental housing for workers and students.
More support policies were needed to attract investors to the sector, he said, adding that developers should diversify rental housing to meet a wide range of budgets.
Nghiem also urged the city to pay more attention to housing in the city's rural areas, as up to 11 per cent of housing in these areas was uncompleted or dilapidated.
Former principal of the University of Construction Pham Ngoc Dang said investors had been focusing too much on quick profits in the commercial housing sector at the expense of developing low-cost housing and housing for the rental segment. Loan applicants who are state employees just need to have their employers confirm whether they already have a home. Meanwhile, those who work for companies in other economic sectors than the state one may find it tough as they must seek a confirmation from ward-level authorities.
Another problem is the home purchase contract requirement. Banks want homebuyers to show their home buying contracts to take out a loan whereas homebuyers do not feel secure to sign the contracts with apartment developers without a bank loan being approved beforehand.
“It is a vicious cycle,” said M. He said he took risk when deciding to sign a home contract to complete his loan application.
For about one month, M had shuttled between the lender and the project owner to make the application complete. Eventually, he got VND600 million from BIDV, with a monthly installment of some VND8 million (principal and interest combined).
Also buying a Khang Gia-Tan Huong apartment, Hai in District 8 has been struggling with loan application procedures for over three weeks now. The biggest headache is he needs the authority of the ward where he is residing to confirm his housing status.
He worries he might lose his deposit of VND20 million on the apartment. He lives in a rented home at the moment.
Since the VND30-trillion home loan program was launched in early June, BIDV has approved only two loan applications. Meanwhile, at Vietcombank, six applicants have received the nod, with total loans of VND4.1 billion, said Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch.
A senior source from a BIDV branch said many clients hit the wall when it came to seeking a confirmation from ward authorities.
“It’s hard to confirm if families have other houses than the one where they are staying. Who will be responsible for inaccurate confirmations? Therefore, many homebuyers have been unable to get a confirmation for their loan applications,” said the source.
For property firms in need of preferential loans, only VND9 trillion is available now, but many businesses want to borrow. In HCMC, the list of property developers eligible for loans is still awaiting the confirmation from the Department of Construction, and has yet to be issued to banks.
Banks will be caught in an awkward situation if the loan amount for corporate borrowers in the program runs out after they have signed loan agreements with enterprises.
Poor, students get priority in City housing
Upgrading apartments and building new ones for poor households and students will be a top priority under HCM City's housing development programme for the 2012-15 period.
Trinh Dinh Dung, Minister of Construction, said last Saturday that the city and the ministry would work together to encourage private investors to pour money into low-income housing and resolve problems related to high land prices and bank interest rates.
Owners and landlords would also be encouraged to charge affordable rental prices.
Under the programme, all developers of commercial housing projects will be required to set aside 20 per cent of land for social housing.
Commercial banks and private construction companies would also be encouraged to join the effort.
Le Hoang Quan, chairman of HCM City's People's Committee, said that upgrading and replacing apartments was a top priority.
The city has 2 million apartments serving 6.5 million people, and half of them are poor in quality.
By 2015, the city plans to provide total floor place of 2.7 million square metres for the poor and for people with low incomes.
Of that amount, 0.6 million square metres of floor place would be used for student housing (serving 100,000 people), while 0.8 million square metres (93,000 places of residence) will be allotted for unskilled labourers.
The building of apartments under 25 square metres each will also be allowed.
In addition, 17,500 apartments will be built to sell or rent to manual workers, migrant labourers and low-income groups, and more than 25 apartment blocks will be built as part of resettlement projects.
The city will also construct more hospitals, schools and markets in resettlement areas. In addition, it will create preferential credit, repayment and land tax policies to encourage private enterprises to build student dormitories.
A recent survey by the Ministry of