Will low-cost commercial housing take the throne in 2017?

A wave of investors is gradually shifting from high-end projects to affordable housing projects. The race for market share in the affordable commercial apartment segment is expected to explode in 2017.

There are still many factors preventing the development of the low-cost housing and social housing segment.

Regarding this issue, Mr. Nguyen The Diep - Permanent Vice President of Hanoi Real Estate Club had the following discussions:

Can you tell us what are the important factors that created the highlight of the Vietnamese real estate market in 2016?

- 2016 is the first year, marking the starting point of the real estate development cycle. The nature of our market is very good, the demand for buying houses is really high. In addition, the investment demand of secondary investors and small investors also began to develop. Because of these factors, the real estate market in 2016 developed very evenly.

However, the low-cost housing segment is often in a state of supply not meeting demand. This is clearly a weakness and also a segment that we are neglecting. Therefore, the Government needs to have stimulus packages or macroeconomic policies to encourage the growth of this segment to satisfy consumer demand. At the same time, it is also a driving force for the Vietnamese real estate market in 2017.

Recently, we can see many big names, the most prominent of which is probably Vingroup, investing in the low-cost housing segment. In your opinion, how will this impact the Vietnamese real estate market in 2017?

- As we know, there is currently a bottleneck preventing the development of the low-cost housing segment, especially social housing. Specifically, our current macroeconomic policies are not consistent. For example, when lending, we must create conditions for both investors and home buyers to borrow capital. If we only prioritize one of the two above subjects, the supply-demand balance will be skewed. At that time, either buyers do not have money to buy houses, or investors do not have enough capital to develop low-cost housing projects to meet buyers' needs.

Recently, many large corporations, including Vingroup, have announced that they will develop low-cost housing projects with each house valued from 700 million to 1 billion VND. I think this is a very good trend. Low-cost houses are built according to the commercial housing model, helping people easily access this segment. Now, the State needs to have strategies and incentive policies to socialize the real estate sector. We should not only rely on social housing policies, but also need to expand the low-cost housing segment further to satisfy people's home buying needs.

According to you, in 2017, can low-cost commercial housing replace social housing?

- The demand for buying cheap commercial houses is always high. Even when the market is frozen, this demand still exists. This is the real demand for buying houses of customers.

Experts all assess that low-cost commercial housing is the foundation of Vietnam's real estate. However, for low-cost commercial housing to truly become a real foundation, the State needs to issue synchronous, long-term macro policies for the low-cost commercial housing segment. Not only satisfying the people's need to buy houses, but also meeting their requirements. These subjects include not only the 8 subjects who are allowed to rent or rent-purchase social housing of State-owned houses, but also the urban poor and those who need to buy houses.

But as I mentioned before, the support and lending policies are not only for investors or home buyers but for both. Only then can we develop the real estate market to its inherent potential and promptly meet market needs at different times. On the contrary, if we cannot build synchronous development policies, all problems will become lame and it will be difficult to achieve the proposed development goals.

Do we need a loan support package similar to the 30,000 billion preferential credit package?

That's right. We need a package with a bigger value, and the time cannot be 36 months but longer. That way, investors will have the opportunity and courage to invest, and buyers will have the confidence that they can borrow money and buy a house. This is what we need to do.

But it is difficult to come up with a stimulus package in the current budget context. Do you think we need a separate interest rate mechanism for investors so that they can confidently develop the low-cost commercial housing segment?

- In my opinion, it is necessary to socialize real estate so that large enterprises and corporations can confidently invest in this segment. The issued policies and mechanisms must create conditions for enterprises and corporations to access land more easily, and administrative procedures must be implemented more quickly and conveniently. In addition, there must be a short-term loan policy for them to invest in developing housing projects in this segment.

For the people, it could allow them to borrow at a rate slightly below the commercial rate, making it easier for them to access this segment.

Previously, Becamex has developed a fairly good low-cost housing system for workers. So what experience does their success bring us in implementing low-cost housing projects?

- I think this is the result of a good policy. Recently, Vingroup also announced that it will invest in this housing segment. I think this is the time for the State to have policies and mechanisms to encourage businesses and further socialize this field.

In the immediate future, the State needs to invest some capital as “seed” capital to create momentum for the market to develop. We must make the low-cost commercial housing segment truly become the driving force of the market, only then will businesses have enough confidence to invest.

Thank you!

According to Hoang Thang/danviet