Hanoi (VNS/VNA) - Social housing projects that developers were hesitant toinvest in due to capped profit suddenly gained traction as giant developersrecently announced plans to step into the segment.

Notably, Vinhomes, a member of Vingroup, said at its annualshareholder meeting in mid-March that Vinhomes would develop socialhousing projects under the brand Happy Home for low-income earners.

Vinhomes, known for its luxury home brand, plans to develop 500,000 socialhousing units in the next five years. The first projects would be built in theoutskirts of Hanoi and HCM City at the prices from 300 million VND to below 1billion VND each and are expected to be handed over to buyers in June 2023.

Other developers have also stepped into social housing projects.

Him Lam Group recently announced the social housing project Thuong Thanh, whichcovers more than 60,000sq.m in Long Bien district, Hanoi. Each departmentwill have areas ranging between 37sq.m and 77sq.m and prices from 550million VND per unit.

Another social housing project of Him Lam was Him Lam Phuc Loi, also in Long Bien,which will supply about 3,000 apartments to the market.

Early this year, Hung Thinh Group, Dong Tam Group and Truong Thanh FurnitureCorporation announced an affordable housing initiative expected to solve theincreasing housing demand of low-income earners and help them settle down.

The initiative will be implemented in HCM City, Long An, Binh Duong and DongNai first with 100,000 units.
Hoa Binh Groupplans to develop 10,000 social housing units in Hoang Mai district, whileThang Loi Group targets building about 10,000 apartments below 1 billion VND eachon the market this year.

According to Le Hoang Chau, President of HCM City Real Estate Association,affordable apartments accounted for just 1 percent of the total supply tothe market in 2020. Notably, 2021 saw no new release of any social housingprojects, causing a market imbalance.

There was a severe shortage of affordable homes, Chau said, adding thatlow-income earners showed real demand for homes, but the prices werebeyond their incomes.

Chau said the Government should raise support for developers in social housingdevelopments.

For many years, social housing projects did not attract developers because oflow profits, around 10-15 percent, only equivalent to one-third of the profitswhen they built commercial housing projects, property expert Nguyen Nhat Longsaid.

Another problem was complicated procedures while the Government’ssupport was not attractive enough, he said.

“I see a change in the mindset of property developers. They do social housingprojects not only for profit but also for contributing to social security,”he added.

According to Nguyen Vinh Quynh from Minh Bach Law Firm, the shortage ofaffordable homes alongside skyrocketing prices means social housingprojects are considered a “cool breeze” to soothe the housing market.However, how to build an apartment for a few hundred million dong remains a question.
Vuong Quoc Toan,chairman of Lan Hung Group, said that the Government should help thedevelopment of social housing projects.

Toan said that the policy of requiring developers to spend 20 percent of theland for commercial housing projects for social housing development did notwork effectively in reality, which even caused construction delays.

According to Nguyen Xuan Quang, chairman of Nam Long Group, social housingprojects and affordable homes needed breakthroughs in policies andadministrative procedures.

It was necessary to develop a specific mechanism for developing social andlow-cost commercial housing, Quang said, adding that a clear definition wasneeded in terms of area and selling price to raise appropriate preferential.

He stressed that preferential financial packages were important to thedevelopment of social housing projects.

The Government has issued the national housing development strategyfor 2021-30 with a vision for 2045, focusing on developing socialhousing and homes for workers to meet the demand and affordability of middleand low-income households.

The Government asked the development of social housing projects to work intandem with socio-economic development planning and synchronousinfrastructure./.