VietNamNet Bridge – The construction ministry will focus on housing development this year, especially social housing projects, said Minister Trinh Dinh Dung at a recent meeting.

A villa under construction at the Hoang Yen 2 Project in Hoa Binh Province's Luong Son District. The Ministry of Construction will focus on housing development this year.

Dung added that the real estate market was identified as one of the priority sectors of the ministry during this year, adding that it would continue to implement measures to tackle difficulties faced by the realty market in line with the implementation of the national housing development strategy.

Real estate projects would try to meet the market demand, with the ministry aiming to boost the number of social housing projects and small and medium-sized commercial apartments at affordable prices, Dung said.

The ministry has reported that more than 100 social housing projects in major cities have been completed, including 38 projects with 19,680 apartments for low-income earners and 64 housing projects with 20,270 apartments for workers.

About 150 other projects are under construction, including 91 housing projects for poor people and 59 projects with 122,500 apartments for workers.

The management and supervision of construction will also be tightened and the quality of planning will be improved.

The ministry aims to raise the urbanisation rate to touch 35.5 per cent in 2015, with the average accommodation space being 21.5 sq.m per person.

Improvements

Dung stressed that the property market registered improvements last year with a large number of successful transactions, falling inventories and increasing outstanding loans in the property sector.

The domestic construction sector's production value last year was VND849 trillion (US$39.8 billion), a seven per cent year-on-year increase.

Of the total, the production value of State-owned enterprises was VND84.3 trillion ($3.9 billion), a nine per cent fall over 2013 and accounting for 10 per cent of the total, and that of the private sector was VND709.9 trillion ($33.3 billion), accounting for 84 per cent of the total. The foreign direct investment enterprises contributed VND54.8 trillion ($2.5 billion).

The latest report of the construction ministry also showed that the country last year had 75,998 construction businesses, 3,770 more than the previous year.

FDI was poured mainly into real estate trading and construction in the sector.

The ministry said that the construction businesses accelerated restructuring, helping in retaining jobs and ensuring labourers' income. Several property firms have actively invested in social housing projects, while the firms involved in building material production have expanded their export markets.

The ministry completed the equitisation of four corporations, including Water Supply, the Sewerage Mechanical Construction Joint Stock Company (Viwaseen), the Ha Noi Construction Company and the Bach Dang Construction Company. It also plans to equitise the remaining nine corporations this year.

The ministry's corporations have implemented divestment worth VND2.37 trillion ($111.2 million), meeting 47 per cent of the set target.

Estate inventory reduced

As of December 15, 2014, the country's total estate inventory was VND73.8 trillion ($3.4 billion), a 40 per cent fall in comparison with 2013.

The ministry said that the property market has seen signs of recovery since the last few months of 2013. Last year, the market saw an increasing number of estate transactions.

There were 11,450 successful transactions in Ha Noi last year, double the figure of 2013. In HCM City, there were 10,350 transactions, a 30 per cent increase over the previous year.

The housing prices in the 2011-13 period fell steeply by 30 per cent. However, the prices were relatively stable last year.

The market availability has been revised as the profiles of 60 projects were changed from commercial to social housing with 38,897 apartments. Seventy-four other projects applied to reduce the apartment areas to suit the market demand.

The outstanding loans in the sector amounted to VND299 trillion ($14 billion), a 14 per cent increase over 2013, and 13 per cent higher than the economy's average level.

The ministry also revealed that by the end of last year, the country disbursed VND9.4 trillion ($441 million) from the VND30-trillion ($1.4 billion) housing stimulus package, meeting 31 per cent of the total.

The disbursement in the second half of last year was double the amount in the first-half, after the government promulgated the revised Resolution 61/CP and supplemented Resolution 02/CP to allow more people to access the loans as well as to extend the term period.

In reply to a question whether the package aimed to save property companies instead of low-income earners, Chairman of the HCM City Real Estate Association (HOREA) Le Hoang Chau said that its target was to resolve the inventory and bad debts in the market.

"If the disbursement was faster and focused on home buyers, the package will have a large impact on the market. However, the disbursement was too slow and not up to expectations," Chau said at the online forum in Property Market 2015, held in HCM City on Thursday.

The association had suggested extension of the deadline for the package's disbursement to the end of 2018, instead of 2016, as stipulated. However, the proposal was rejected.

He added that HOREA would continue to ask the government and relevant ministries to issue specific policies supporting home buyers in social housing projects.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's branch in HCM City, said that 10 new banks would participate in the disbursement of the package. They are Eximbank, Bao Viet, Saigonbank and PVCombank, besides TienphongBank, OCB, VPBank and Seabank, as well as NamABank and SHB, bringing the total to 15 banks.

In addition, there would be new solutions to accelerate the disbursement of the package in the near future, including expanding the list of people who are eligible to apply for the loans, reduced interest rates and extension of the term to 15 years, Minh added.

VNS