HoREA suggests developing small-sized apartments

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SaigonTimes English - 27 month(s) ago 5 readings

HoREA suggests developing small-sized apartments

HCMC – The HCMC Real Estate Association (HoREA) has suggested developing residential areas with small-sized apartments from 20 to 70 square meters for singles and small families to meet the current demand for housing.

HoREA suggests developing small-sized apartments

By Dinh Dung - The Saigon Times Daily

A high-end apartment building is seen on Nguyen Huu Tho Street, Nha Be District in HCMC. The city’s housing developers association is calling for solutions to bolster the sluggish property market - Photo: Dinh Dung
HCMC – The HCMC Real Estate Association (HoREA) has suggested developing residential areas with small-sized apartments from 20 to 70 square meters for singles and small families to meet the current demand for housing.

As the country is still developing, building small-sized apartments in accordance with the urban planning of each locality is the most appropriate and necessary solution in the current period, said HoREA chairman Le Hoang Chau at a seminar on solutions to unfreeze the property market held in HCMC on Tuesday.

The Binh Duong-based Becamex IDC has recently kicked off a project to construct 3,000 apartments of 30 square meters each, worth VND90 million per unit, which is considered a breakthrough to realize the dream of low-income people to own a home.

Chau said this model should be deployed on a national scale.

He stressed the realty market has experienced tough times since 2008, causing many problems to project developers, investors as well as consumers. Most property firms have to struggle with capital shortages, difficult access to bank loans, and sky-high lending rates of 24-25%.

Property trading remains dull, leading to a slump in the market liquidity, which is associated with the liquidity of the banking system. Relevant industries like cement, steel, and interior furnishing items are also dragged down.

To cope with the general difficulties, property enterprises must come up with solutions such as restructuring business and investment, postponing projects, offering discounts along with various promotion programs to stimulate consumer demand.

The market has yet to prosper since the deposit rate ceiling was lowered by one percentage point last week, or the HCMC government said it was considering buying unsold mid-end apartments for resettlement purposes.

Therefore, the outlook of the realty market is still dreary in 2012, with the biggest challenge being to improve sales and market liquidity, handle the unsold units and regain consumer confidence.

HoREA suggested there should be a specific schedule to pull down lending rates to 11-12% per year. In addition, the Government should adopt policy to offer consumers preferential interest rates for their first house purchase.

The association also proposed removing the land use fee slapped on property projects and imposing a tax rate of 10-15% instead.

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