The shortage of affordable rental housing in Ha Noi will get worse if local authorities do not pay more attention to housing projects, especially for people living in the rural outskirts of the city, experts recommended.— File Photo

HA NOI (Biz Hub)— The shortage of affordable rental housing in Ha Noi will get worse if local authorities do not pay more attention to housing projects, especially for people living in the rural outskirts of the city, experts recommended.

The comments were made at a meeting last week held by the city's Fatherland Front Committee to collect feed-back on the city's proposed Housing Development Programme for the 2012-20 period.

In 2011, the city had nearly 147 million sq.m of housing, and the average housing area for a person in the city was about 21.5sq.m, three square metres more than the average figure for the whole country.

Under the draft, the city aims to raise the average to 23.1sq.m per person by 2015, 26.3sq.m by 2020 and 31.5sq.m by 2030.

At present, rental housing makes up about 14 per cent of the capital city's total housing area.

The city aims to have rental housing projects accounting for 25 per cent of housing projects in the next three years. The target percentage will rise to 30 per cent by 2020.

Former president of the Ha Noi Urban Planning and Development Association Dao Ngoc Nghiem said that rental housing sector needed more investment, especially as the city was a hub of industrial zones, universities and colleges with huge demand for rental housing for workers and students.

More support policies were needed to attract investors to the sector, he said, adding that developers should diversify rental housing to meet a wide range of budgets.

Nghiem also urged the city to pay more attention to housing in the city's rural areas, as up to 11 per cent of housing in these areas was uncompleted or dilapidated.

Former principal of the University of Construction Pham Ngoc Dang said investors had been focusing too much on quick profits in the commercial housing sector at the expense of developing low-cost housing and housing for the rental segment.

The focus on high-end housing has also resulted in great waste. According to the city's Construction Department, a check on 16 housing projects in the middle of last year found that there were about 655 villas, 574 houses and 174 apartments left unused in the city. The high-end housing segment was oversupplied while there was a shortage of low-cost housing for low-income earners and the poor.

In a bid to ease the plight of low-income earners in search of housing, from this month loans with preferential interest rates will be available for housing developers and those with low incomes to buy, rent or build low-cost housing.

During an online discussion early last week on the disbursement of the preferential loan package worth VND30 trillion (US$1.42 billion), Deputy Minister of Construction Nguyen Tran Nam said that housing projects developed with credit from the stimulus package should offer prices of less than VND12 million ($570) per square metre.

Notably, there were projects in which developers could offer lower prices, for example, Viglacera's Dang Xa social housing project in suburban Dong Anh District offering prices of VND8.5 million ($404) per square metre.

"The prices reflect the efforts of the Government and developers," he said, adding that people should not have to spend more than 30-35 per cent of their income on housing.

For example, those who had a monthly income of about VND6 million – 9 million ($285-420) could afford to buy a house in a social housing project with area of at least 30sq.m, priced at VND250 million ($12,000) as they can borrow bank up to 80 per cent of the house's value and pay back the loan during the next 10 to 15 years.

However, with current prices of land and building materials, it was impossible for developers to offer apartments priced between VND80-90 million ($3,800 – 4,200) for those who had lower income, he said.

"So, they have to rent homes," he said, adding that the ministry was seeking measures to support low-income tenants so that they would only have to spend about VND2 million ($95) for housing each month.

The Government was planning to have particular policies to boost rental housing, Nam said, noting that this was part of regulations on management and development of social housing, expected to be approved by the Prime Minister next month. — VNS