Minister of Construction Nguyen Thanh Nghi made the statement during the question-and-answer session of the 4th sitting of the 15th National Assembly (NA) on Thursday afternoon after NA deputy Nguyen Thi Le of HCM City asked him about the ministry’s plans to encourage the development of social housing. Currently, the supply of social housing has failed to meet the demand of workers and employees.

Nghi also said that the settlement of housing for people and social housing for low-income people still faces shortcomings and difficulties although housing development has always been a concern of the Party and State.

He pointed out some reasons for the situation, including obstacles in the legal corridor; a lack of sufficient preferential capital to implement the policy; and the failure to spend investment resources or develop land funds for social housing projects.

Also relating to the social housing issue, NA deputy To Van Tam of Kon Tum Province said that the prices of social housing are at a very high level compared to workers’ incomes. Some data showed that the average price is above VND15 million (US$602) per sq.m, even VND21-25 million ($844-1,000) per sq.m.

Thus, Tam asked Nghi about the reasons for the situation and whether or not the ministry could bring the prices of social housing in line with the financial ability of workers.

“If yes, how long will it take?”, Tam said.

Nghi admitted that social housing prices are at a high level now.

The reasons include the unstable supply of social housing; the limited land fund for social housing development; uncertain capital sources for social housing development; and poor policies to encourage social housing projects, he added.

To fix the situation, some laws have to be adjusted to encourage social housing development, he said.

The ministry is submitting to the Prime Minister a project to develop one million social housing apartments, trying to meet the housing needs for low-income people and industrial park workers, he said.

Also at the question-and-answer session, NA deputy Hoang Van Cuong of Hanoi asked Nghi about the forecasted development trend of the real estate market in Vietnam; the difficulties in the development of the real estate market in Vietnam; as well as solutions to promote development in the future.

Nghi said currently, the real estate market faces a number of limitations. The legal system related to land, construction investment, and real estate all need to be amended.

The implementation of real estate projects in most localities has faced difficulties, leading to a decrease in supply, he said.

The structure of real estate products continues to be unreasonable, he said.

There is a serious shortage of social housing for low-income people and real estate prices are much higher than people's incomes, he said.

The management of construction planning, land use and the local real estate market is still inadequate. The control of investment capital flows into the real estate sector is still potentially risky, he said.

Nghi also said that the real estate market fluctuates due to the impact of the macroeconomic situation, the supply of all kinds of real estate assets at different market segments is too short or too redundant compared to demand, the financial and credit policies for real estate are uncertain, and there is a lack of timely and reasonable intervention of the State in the real estate market.

It is forecast that the real estate market will continue to face difficulties, and the supply will continue to lag behind demand, he said.

Nghi said the ministry will drastically implement the solutions issued by Government and the Prime Minister, such as controlling real estate credit structure to ensure proper use and avoid risks; facilitating lending to the real estate sector in accordance with the law; giving priority to loans for social housing projects; raising capital on the stock market; and removing difficulties for ongoing projects in terms of procedures, land and construction planning to increase supply for the market. 

Source: Vietnam News