Low-income earners still find it difficult to buy a home.

Low-income earners still cannot afford homes, even though housing prices are now considered less inflated. Ho Chi Minh City, with its many support policies, has only managed to address a small fraction of the housing needs for this group.

Many efforts…

Since 2003, Ho Chi Minh City has issued Directive No. 07/2003/CT-UB stipulating several policies on housing for low-income earners. Several regulations on tax policies, capital support, investment procedures, etc., have been issued to support investment projects in building housing for low-income earners. The city also stipulates that some investment projects must allocate at least 10% of the land fund for housing construction or 20% of the housing units for sale to the land fund serving the low-income housing program.

Low-income earners still cannot afford these apartments.

Over the past 10 years, the Ho Chi Minh City Housing Development Fund has disbursed over 600 billion VND to nearly 2,000 low-income individuals. It has provided loan support for numerous low-income housing projects such as the Ngo Gia Tu resettlement apartment complex, Nguyen Kim, 109 Nguyen Bieu, 481 Ben Ba Dinh, 241/1/25C Nguyen Van Luong resettlement apartment complex, and the An Suong social housing project, with a total disbursed capital of nearly 330 billion VND. In 2013, the Fund disbursed 164 billion VND, and an estimated 172 billion VND was disbursed in 2014. However, these investments are still very small compared to actual needs, as the Ho Chi Minh City Institute for Research and Development estimates that the city currently has over 100,000 low-income individuals requiring housing.

Ms. Dao Thi Huong Lan, Director of the Ho Chi Minh City Department of Finance and Chairwoman of the Ho Chi Minh City Housing Development Fund Management Council, stated: The demand for housing for low-income earners is very high, but the supply has not developed proportionally. The city is aiming to build an average of approximately 675,000 square meters of housing floor space annually, and by 2015, to construct 17,500 apartments, equivalent to about 1.3 million square meters of floor space, to serve low-income earners who need housing to buy or rent.

In addition, the city also plans to build approximately 800,000 square meters of housing for workers, enough to accommodate about 93,000 laborers. “To make it easier for low-income earners to access housing loans, we are also proposing to increase loan amounts and further lower interest rates to make it more accessible to the poor,” Ms. Lan stated.

Many shortcomings remain.

The frozen real estate market, coupled with numerous preferential policies for social housing construction, led many businesses to convert commercial housing projects into social housing and pour investment capital into this segment. However, after a short period of "rushing" into social housing projects, these businesses also "fled" or requested to convert social housing projects back into commercial housing projects.

At the time the Government's Resolution 02/NQ-CP was issued, along with preferential credit packages focusing on the low-cost housing segment, social housing became the focus of investors' attention. Subsequent government regulations, such as allowing the subdivision and conversion of commercial housing projects into social housing, created positive signals for this segment. However, to date, many experts believe that the supply of social housing that meets actual needs is still insufficient, while the procedures for verifying eligibility to purchase homes in social housing projects are cumbersome, causing the social housing segment to almost reach a deadlock.

On August 21, 2014, the Government issued Resolution 61/NQ-CP allowing homebuyers to borrow from the 30,000 billion VND credit package, provided the value of the house does not exceed 1.05 billion VND, and the loan term is extended from 10 to 15 years. This relaxation of conditions has enabled commercial housing projects to access the 30,000 billion VND package. Many investors who previously sought to convert commercial housing projects into social housing projects are now quickly applying to convert them back into commercial housing projects, as social housing projects no longer offer significant advantages, while the procedures remain cumbersome.

When the social housing segment is no longer attractive to investors, low-income earners can only rely on preferential policies from state-funded social housing projects. However, even state-funded projects, built on public land with many incentives for poor civil servants, are still inaccessible to the truly poor, and most of these apartments end up in the hands of wealthy individuals who do not need housing.

Through intermediaries or online classifieds, it's easy to see that numerous apartments in the city's social housing projects are being openly advertised for sale or rent. Although, according to regulations from the City People's Committee, those renting or lease-purchasing social housing are not allowed to sell or transfer their lease rights to others without the written consent of the Department of Construction, violations will result in revocation. The To Hien Thanh apartment complex is one example. This project was built on public land, funded by the Saigon Real Estate Corporation, and put into use in early August 2013. The target buyers and renters of this project are city officials and civil servants eligible for social housing. However, many people, after purchasing social housing, have left their apartments vacant or rented them out for profit. Quite a few social housing apartments with areas of 55-60 m2 are advertised for rent at prices ranging from 6-7 million VND per month.

According to Mr. Le Manh Ha, Director of the Department of Housing and Real Estate Market Management (Ministry of Construction): Social housing policies still have many inappropriate regulations. The implementation process is still rigid, procedures for accessing loans to buy houses are difficult, while the quality of services is not good.

According to news