Construction Joint Stock Company No. 3 (Hanco 3) has to date sold only 30 out of more than 130 apartments in a low-income housing project in Sai Dong Town, Gia Lam District, despite holding a second lottery to deal with the large number of customers interesting in the project.
Another project in Sai Dong Town built by the Hanoi Housing Development and Investment Corp. (Handico5) has found just over 100 customers for their 420 apartments.
Only 15 people signed have signed contracts to buy apartments in a low-income housing project invested in by the Vietnam Glass And Ceramics For Construction Corp. (Viglacera) in the Dang Xa Urban Area in Gia Lam District.
Currently, around 1,000 low-income apartments in Hanoi are still waiting for customers.
House prices for low income earners currently stand at VND13 million (USD619) per square metre compared a common commercial prices of VND14-15 million per square metre.
Nguyen Thu Huyen, a Dang Xa project customer said, “If the state offers the opportunity for low-income earners to access mortgages to buy a 60-square metre apartment over five-year term of payment, then you’d have to pay VND100 million (USD4,739) before interest, or VND8-9 million (USD380.9-428.57) per month. There’s no way a low-income family can afford that.”
People have also complained about the complicated procedures that need to be gone through before buying a low-income house, Huyen added.
Despite making great effort to buy a 70-square metre low-income apartment in Ha Dong District, Nguyen Dinh Toan felt that he couldn’t afford the price. He paid a 30% desposit and now has to pay additional VND200 million (USD9,500) to the investor. This has made it impossible for him to continue with his purchase, and instead he has to pay a fine to back out of the project.
Difficulties for investors
Tran Van Nguyen, Deputy Director Hanco 3, said low-income housing apartment prices vary depending on the market. The rise in construction material prices has raised prices, pushing properties out of the reach of many customers.
Tran Van Can, Chairman of Handico5 admitted low-income houses remained unattractive due to their high prices, noting that many had returned the apartments to their investors after qualifying for the accommodation.
According to Nguyen Van Da, Deputy Director of Vinaconex Xuan Mai, the firm’s Kien Hung project in Ha Dong District was also seeing many customers withdraw from their contracts.
Failures
The Ministry of Construction launched a programme to build apartments for low-income earners in 2009. It expected that up to 189 projects would be implemented during the 2009-2015 period to provide accommodation for around 700,0000 people.
However to date, only 39 projects have begun construction with total investment of VND4 trillion (USD190.4 million), yet many projects remain unattractive due to their high prices.
According to Nguyen Tan Van, Chairman of the Vietnam Architects Association, the state should offer preferential rent prices to low-income group to ease the urgent need for accommodation.
Tong Van Nga, Former Deputy Minister of Construction, said low-income housing should be considered as a state asset and leased to people under the management of an agency.
Payment terms should be extended on mortgages to 10-20 years so that more low-income earners could afford to buy the houses.
