Prime Minister directs development of social housing

Prime Minister Nguyen Tan Dung stated that Hanoi must pay special attention to reviewing planning and developing the housing market in a reasonable manner, focusing on concentrating resources to continue developing social housing, housing for people with meritorious services, housing for workers, students, civil servants, etc.

On the morning of December 19, Prime Minister Nguyen Tan Dung led a Government delegation to work with Hanoi leaders on solutions to remove difficulties in the real estate market. Following Ho Chi Minh City, Hanoi is the second locality that Prime Minister Nguyen Tan Dung and the Government delegation visited to work on this issue.

Attending the meeting were Comrade Pham Quang Nghi, Secretary of the Hanoi Party Committee, Deputy Prime Minister Hoang Trung Hai, Deputy Prime Minister Vu Van Ninh, leaders of relevant ministries and branches, leaders of a number of banks and enterprises in the area.

Photo: VGP/Nhat Bac

Imbalance of commodity structure

Leaders of many central ministries, branches, banks, and businesses said that the difficulties of the real estate market stem from many causes. The explosion in prices and transaction volume in a short period of time in Hanoi and other major cities has sent out false signals about the real demand and affordability of the market, causing businesses to rush into real estate development investment, including businesses without experience and weak financial capacity.

Along with that, the structure of real estate goods develops unbalancedly, businesses focus too much on investing in high-end, large-area houses; the social housing development program serving social policy beneficiaries, low-income people in urban areas, and workers in industrial parks is slow to be implemented.

According to Chairman of Hanoi People's Committee Nguyen The Thao, Hanoi's real estate market is sluggish due to overheated development in recent times. The sharp increase in housing prices is mainly due to speculation, an unbalanced housing market, a surplus of high-end housing while there is a shortage of housing for middle-income and low-income people.

In addition, financial and credit policies for the real estate market are incomplete and inadequate. Administrative procedures in architectural planning, construction investment, land, compensation and support for site clearance still have many shortcomings.

Currently, the total number of unsold apartments in Hanoi is nearly 5,800 units, equivalent to over 566,600 m2 of floor space; low-rise houses (villas, townhouses) have 3,483 units in stock, equivalent to 874,825 m2 of floor space; low-income housing has about 330 unsold apartments (currently continuing to receive home purchase applications); office floor space eligible for lease is about 175,000 m2.

Meanwhile, the housing demand of middle-income and low-income earners is still very large (households with an average area below the average are about 375,000 households, equivalent to 52% of households in the city; there are about 114,500 civil servants and employees who need to buy housing).

Propose multiple solutions

Many opinions agree that in the current context, removing difficulties for the real estate market is an extremely necessary task, requiring high concentration with drastic and synchronous solutions.

Chairman of the City People's Committee Nguyen The Thao said that the city's policy is to reduce and limit supply, stimulate and support demand, adjust the capital structure to match demand, strengthen the role of state management with a number of key groups of solutions identified as: reviewing supply and demand for housing, determining specific market needs to restructure products; having policies to stimulate demand, creating conditions for people with real housing needs to access housing funds and credit sources with low interest rates; supporting and removing difficulties for real estate businesses, especially resolving bad debt and policies to support capital, resolving unsold housing funds;...

Hanoi proposed that the Government issue a Resolution on a number of solutions to remove obstacles and stabilize the real estate market as a basis for ministries, central branches and localities to implement; consider approving the Project on a number of housing mechanisms and policies for salary earners in the city;...

At the same time, it is recommended that the relevant ministries and branches propose to the Government to adjust and supplement policies on credit, tax, and land, such as continuing to implement regulations on land use fee deferral according to Resolution 13 of the Government; considering reducing VAT for first-time home buyers; considering bad debt write-off, reducing credit interest rates, establishing financial support packages, etc.

Minister of Construction Trinh Dinh Dung said that first of all, it is necessary to review housing development projects and new urban areas, and classify housing and real estate development projects. - Photo: VGP/Nhat Bac

Minister of Construction Trinh Dinh Dung said that the real estate market in Hanoi is different from the market in Ho Chi Minh City, that is, the freezing situation occurs more slowly, the number of projects is less, but the scale of each project and the whole is larger; the number of small and medium enterprises participating in the market is less; the real estate debt is less, capital is mainly mobilized from home buyers; housing prices are also higher compared to projects with the same conditions.

Minister Trinh Dinh Dung said that first of all, it is necessary to review housing development projects and new urban areas, classify housing and real estate development projects, and handle projects that have not yet cleared land or are clearing land but are not in line with local development plans.

For housing projects that are under construction or have been completed but are unsold due to the large apartment area, depending on the area, it is allowed to adjust the apartment structure to suit the needs and payment capacity of the majority of people.

For commercial housing development projects that have cleared the site but have not yet implemented housing construction, it is allowed to restructure the project and switch to social housing to serve low-income people and workers.

In addition, it is also necessary to promote administrative procedure reform, especially quickly resolving procedures to allow for adjusting the structure of projects in inventory and unfinished construction to suit market demand; procedures for converting from commercial housing projects to social housing.

Affirming that the State Bank will provide maximum support to people with real housing needs, Governor Nguyen Van Binh proposed that removing difficulties for the real estate market requires a long-term solution, in which special attention should be paid to continuing to focus on perfecting the system of legal documents related to urban development and housing...

Agreeing with the above viewpoint of Governor Nguyen Van Binh, Minister of Natural Resources and Environment Nguyen Minh Quang said that in addition to promoting the development and sale of social housing, we should consider and expand the form of social housing rental.

Appreciating Hanoi's efforts in removing difficulties for the real estate market in recent times, Deputy Prime Minister Vu Van Ninh suggested that Hanoi should continue to effectively and synchronously implement both short-term and long-term solutions, focusing on adjusting planning, ensuring balance between supply and demand for housing; at the same time, paying more attention to stimulating demand, developing social housing, student housing, worker housing, etc.

Deputy Prime Minister Hoang Trung Hai said that to solve the housing backlog, commercial banks must open credit for buyers. In addition, it is necessary to expand the form of house rental to contribute to meeting the maximum housing needs of all classes of people.

There are also proposals to study regulations on housing types with limited ownership to diversify housing types, in accordance with the actual market situation; allow the conversion of unsold inventory housing projects into service projects in demand and in accordance with planning such as hospitals, schools, hotels, commercial services, etc.

Prime Minister Nguyen Tan Dung: Hanoi must pay special attention to reviewing planning and developing the housing market in a reasonable manner.
- Photo: VGP/Nhat Bac

Enhance information transparency and disclosure

Appreciating the solutions proposed by Hanoi to remove difficulties for the real estate market, considering these practical solutions contributing to the Government's general solutions in solving difficulties for the real estate market, Prime Minister Nguyen Tan Dung said that the Government will discuss this content at the regular Government meeting in December 2012 and will issue a specialized Resolution on a number of solutions to remove difficulties for the real estate market.

According to Prime Minister Nguyen Tan Dung, the stagnation and difficulties of the real estate market have many causes, first of all, weaknesses in management and planning. Therefore, Hanoi must pay special attention to reviewing planning, developing the housing market in a reasonable structure, focusing on concentrating resources to continue developing social housing, housing for people with meritorious services, housing for workers, students, civil servants, etc.

Along with that is research to build financial institutions to support the market. There are policies to encourage and stimulate housing demand; so that low-income people can also buy or rent houses at reasonable prices.

Promote administrative procedure reform, ensure simplification of administrative procedures in real estate transactions. At the same time, further strengthen the inspection of compliance with legal regulations on land, investment, housing development, and real estate business.

Effectively restructure businesses, focus on restructuring products to suit market needs, reduce product costs, provide products directly to customers with real needs, avoid intermediaries and speculation.

In addition to focusing on handling bad real estate debts, setting up risk provisions, and actively handling mortgaged assets, the State Bank needs to research and propose appropriate and feasible policies to support households borrowing to buy social housing.

Prime Minister Nguyen Tan Dung also noted that ministries, functional agencies and Hanoi need to increase the transparency and publicity of information on real estate market activities, implement synchronous, drastic and comprehensive solutions to gradually remove difficulties for the real estate market, "warm up" each part of the market, and move towards healthy operations and sustainable development of the real estate market in the coming time.

According to (Chinhphu.vn) - LT