Housing always a headache

When it comes to housing prices, this has never been an old issue as the demand for homes in society is always high.

The current housing price has gone beyond the affordability of many people, especially those with a middle income and low income. There is rarely news about housing prices dropping for many years now, but always about them rising.

The HCMC Real Estate Association ( HoREA) in a report said that the housing price is 20 times higher than the average income of city dwellers who can save from VND8 million to VND10 million per month. That means the dream of buying a house is becoming slimmer for many people if they don’t find some means of financial support from other sources.

Besides elements relevant to the market and speculation, HoREA attributed the costly housing price to different costs, including fees for land use, tax, construction costs, financial fees, management fees and “no name” fees, which account for a significant amount but are not officially calculated into a housing project’s cost. To lower the selling price, developers have to trim off unnecessary costs, and state management agencies have to simplify administrative procedures to help shorten the construction time of a project.

Reality indicates that affordable apartments, around VND2 billion each, have almost disappeared in big cities like Hanoi and HCMC in the past two years. Meanwhile, mid, high-end and luxury apartments are abundant. As such, owning a home is a pipe dream of low-income people.

In fact, housing for low-income people is a headache for governments agencies in big cities. The social housing segment was meant to meet the huge housing demand in society, but the result of the program has been modest. Over the past 10 years of development, the number of social apartments has been small, far lagging behind the demand in the market.

As such, the solution of leasing instead of selling off social apartments, as suggested in the article, “In Search Of A Social Housing Model For Vietnam,” offers good food for thought.

Accordingly, the government needs to set aside a budget and land to develop social housing projects, apart from the contribution of private developers. Government agencies should manage those apartments for lease and not sell them, as is the case now. By doing that, those with a low income will have a place to live rather than having nowhere to call home with the current housing price.