Will affordable commercial properties become popular in 2017?

Developers are gradually shifting from high-end projects to affordable housing projects. The race for market share in the affordable commercial apartment segment is predicted to explode in 2017.

Many factors still hinder the development of the affordable housing and social housing segments.

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

Could you tell us what the key factors were that made the Vietnamese real estate market stand out in 2016?

- 2016 marked the beginning of a real estate development cycle. Our market was inherently strong, with a very high demand for housing. In addition, investment demand from secondary and small-scale investors also began to grow. Because of these factors, the real estate market in 2016 developed very evenly.

However, the low-cost housing segment often faces a supply shortage. This is clearly a weakness and a segment we are neglecting. Therefore, the government needs stimulus packages or macroeconomic policies to encourage the growth of this segment to meet consumer demand. Simultaneously, this will also be a driving force for the Vietnamese real estate market in 2017.

Recently, we've seen many major players, most notably Vingroup, investing in the affordable housing segment. In your opinion, how will this impact the Vietnamese real estate market in 2017?

- As we know, there is currently a bottleneck hindering the development of the affordable housing segment, especially social housing. Specifically, our current macroeconomic policies are not synchronized. For example, when providing loans, we must create conditions for both investors and homebuyers to access capital. If we only prioritize one of these two groups, the supply-demand balance will be skewed. In that case, either buyers will not have the money to buy houses, or investors will not have enough capital to develop affordable housing projects to meet buyer demand.

Recently, many large corporations, including Vingroup, have announced plans to develop affordable housing projects with unit prices ranging from 700 million to 1 billion VND. I believe this is a very positive trend. These affordable homes are being built using commercial housing models, making them more accessible to the public. Now, the government needs to implement strategies and policies to encourage the socialization of the real estate sector. We shouldn't rely solely on social housing policies; we need to expand the affordable housing segment to meet the housing needs of the people.

According to him, in 2017, could affordable commercial housing replace social housing?

- The demand for affordable commercial housing remains consistently high. Even during market downturns, this demand persists. This is a genuine need for home ownership from customers.

Experts agree that affordable commercial housing is the foundation of Vietnam's real estate market. However, for affordable commercial housing to truly become a cornerstone, the government needs to enact comprehensive, long-term macro policies for this segment. These policies should not only satisfy people's housing needs but also address their specific requirements. This includes not only the eight groups eligible for renting or rent-to-own social housing owned by the state, but also urban poor and those in need of housing.

But as I mentioned before, support and lending policies are not exclusively for investors or homebuyers, but for both. Only then can we develop the real estate market to its full potential and promptly meet market demands at different times. Conversely, if we cannot build comprehensive development policies, everything will become disjointed and it will be difficult to achieve the set development goals.

Do we need a loan support package similar to the 30 trillion VND preferential credit package?

That's right. We need a package with even greater value, and the timeframe can't be just 36 months; it needs to be longer. This will give investors the opportunity and the courage to invest, and buyers will have the confidence that they can secure loans and buy a home. This is what we need to do.

But introducing a stimulus package in the current budgetary context is difficult. According to him, do we need a separate interest rate mechanism for investors to reassure them and encourage them to develop the affordable commercial housing segment?

- In my opinion, it is necessary to socialize the real estate sector so that large businesses and corporations can confidently invest in this segment. The policies and mechanisms enacted must create conditions for businesses and corporations to access land more easily, with faster and more convenient administrative procedures. In addition, there should be policies providing short-term loans to help them invest in and develop housing projects in this segment.

For the general public, it might be possible to allow them to borrow at a slightly below-commercial rate, making this segment more accessible to them.

In the past, Becamex successfully developed a system of affordable housing for workers. So, what lessons can we learn from their success in implementing affordable housing projects?

- I believe this is the result of a good policy. Recently, Vingroup also announced 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 sector.

First and foremost, the government needs to invest a sum of "seed" capital to create momentum for market development. The goal is to ensure that the affordable commercial housing segment truly becomes a driving force of the market; only then will businesses have enough confidence to invest.

Thank you, sir!

According to Hoang Thang/danviet