It would take 25 years of saving to afford a low-income home.

With commercial apartments converted into social housing costing over 14 million VND per square meter, it would take the poor a quarter of a century (25 years) to complete the payments.

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These figures were presented by experts from the University of Civil Engineering in a paper at the recently held workshop on "Policies and Solutions for Housing for Low-Income People in Urban Areas and Industrial Zones". The data was compiled based on field surveys and sociological investigations of households and individuals in 29 social housing projects in Hanoi, along with interviews with over 40 experts and 6 managers in this field.

Dr. Ta Quynh Hoa from the University of Construction, representing the research team, stated that the average income of residents in the surveyed area is approximately 5.48 million VND per month. In projects designated as low-income housing from the outset, the average selling price of apartments is around 8.19 million VND per square meter. With each apartment measuring 30-40 square meters, Dr. Hoa believes this is affordable for residents, with payments spread over 5-10 years.

However, in projects converting commercial apartments into social housing, the price is around 14.19 million VND per square meter. Ms. Hoa explained that the cost per square meter in these projects is high, so even if the apartments are divided into smaller units, the price remains high compared to the affordability of low-income earners.

"According to calculations and comparisons with the average household income, people would have to save for about 25 years to afford the house mentioned above. This is a figure far too high compared to the social housing models in other countries around the world," Ms. Hoa said.

Meanwhile, representatives of the research group also stated that social housing rental projects still face many difficulties and shortcomings. According to calculations, the average salary of Vietnamese workers is currently around 3.8 million VND per month, with rental costs accounting for about 30%, equivalent to 1.14 million VND.

"Social housing products with higher prices will find it difficult to penetrate the market. Businesses are reluctant to undertake rental projects because they require large capital investments, yield low profits, take 10-15 years to recoup the investment, and involve many risks. Therefore, this model has been rarely implemented in recent times," Ms. Hoa said.

Agreeing with the above assessment, Mr. Tran Ngoc Hung, Chairman of the Vietnam Construction Association, also acknowledged that the current supply of housing for low-income earners is limited, so prices remain high, ranging from 500 million to one billion VND per unit. At that price point, he believes that social housing is currently primarily intended for middle-income and upper-middle-income earners.

Also agreeing that with an income of 4 to 5 million VND per month, it is very difficult for workers to buy a house worth one billion VND, Mr. Nguyen Van Duc, Deputy Director of Dat Lanh Real Estate Company, suggested that efforts should be made to bring house prices down to around 200-300 million VND.

According to this expert, one of the reasons why low-income housing prices remain high is that few businesses are interested in this segment. "There are many reasons why they are indifferent to social housing. These include difficult project approval procedures, multiple stages of house sales, and unfavorable access to loans... In addition, the inspection and auditing process during project operation is complicated, so many businesses are not enthusiastic," Mr. Duc said.

According to him, some businesses in the South are still developing social housing, but only on land in unfavorable locations or that is difficult to sell. Therefore, according to this expert, a change in policy implementation is needed. It is necessary to allow the expansion of the social housing model through a commercial approach. Businesses would be free to sell, customers would not have to go through an approval process, and there would be a financial support package from the State for home loans with interest rates of 6-8% per year.

"At that time, many businesses will compete to participate, actively applying science and technology to reduce the selling price to 10-13 million VND per square meter. Thus, with an apartment area of ​​30 square meters, the total selling price would only be around 300 million VND," Mr. Duc calculated.

Agreeing with this viewpoint, Mr. Hung also suggested that in the future, management agencies should focus on developing affordable commercial housing for rent or installment purchase. The state should only manage planning, while the market will naturally compete on price.

"The management agency should focus on building and managing the social housing development fund, prioritizing preferential interest rate loans for low-income earners with installment payments over 20 years," Mr. Hung suggested.

According to Investment