Low-cost houses in Hanoi remain at high cost

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VietStock FI English - 40 month(s) ago 2 readings

Many low-income households in Hanoi, who were eligible for low-cost houses, were frustrated with the sales of the houses since the price remained unaffordable for them.

Around 3,000 low-cost houses in the capital city were offered at the average price of VND14-15 million (US$750) per square meter. The price in Da Nang and Ho Chi Minh City are VND5 million per square meter and VND5.8 million per square meter respectively.

“A family with four members, of which each need 15 square meter at least, have to pay VND900 million for a house at that price. Obviously, it is not affordable for low-income households,” said a property broker.

Some low-cost house builders even worried eligible buyers as they have not announced the price.

Brokers disclosed many low-income households earlier ironically had to rent low-cost houses that had been bought by rich people due to the high prices.

Analysts said low-cost houses with high prices were unacceptable as builders of the low-cost house projects were offered preferential policies, including special lending interest rates and low costs of relocation.

Builders said the price was reasonable, blaming building material costs increased sharply. However, Construction Deputy Minister Nguyen Tran Nam warned the current prices were too high in spite of the increasing material costs.

Analysts said people were waiting for the Ministry to step in to reassess the cost of social houses for low-income earners.

Statistics from the Ministry of Construction show 37 low-cost house projects with the total investment of nearly VND3.6 trillion (US$180 million) were built on a total area of 750,000 square meters last year.

Up to 728 out of 64,000 houses of the projects have been sold so far. The Ministry is cooperating with relevant units to mobilize capital in an effort to speed up the progress of low-cost house projects, with a target of offering around 70,000 houses in 2011 and 700,000 in the period between 2011 and 2015.

Low-cost houses are aimed at helping low-income earners such as factory workers or public servants.

Eligible candidates are families who have not received any prior housing support from the government, have contributed to the nation's freedom struggles, or those who have received titles as teachers or artists, according to the standards issued by Hanoi People’s Committee in August last year.

The regulations also say that low-cost houses can only be sold to people who earn less than the average income threshold set by the capital city administration of VND3 million a month.

Each family can only apply for low-cost housing at one project at a time. If their application is returned because of a lack of houses at one project, they can apply at another.

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