Hoa Loi Residential Zone serves growing demand in Ben Cat Town in Binh Duong Province, one of the most crowded areas for workers in Viet Nam. — VNA/VNS Photo Quach Lam

HA NOI (Biz Hub) — Viet Nam needs more drastic measures to boost housing development as the country's rapid urbanisation coupled with a young population has made it an urgent issue.

Experts said it was important to improve the living environment and conveniences as urban spaces were becoming narrower.

Tran Dinh Thien, director of the Viet Nam Institute of Economics under the Viet Nam Academy of Social Sciences, said that measures should be initiated to prevent an urban boom from becoming opportunities for property market speculation.

In recent years, urbanisation has been rapid not only in major cities such as Ha Noi and HCM City, but also in other provinces and cities such as Bac Ninh, Thai Nguyen, Quang Ninh, and Dong Nai, apart from Binh Duong and Ba Ria-Vung Tau.

Statistics showed that in 1997, only 20 per cent of the country's population lived in urban areas and real estate deals were conducted largely without bank loans. However, things have changed today when the percentage of urban residents has risen to 34 per cent of the population and bank loans have become more popular for real estate transactions.

With an anticipated population of 51 per cent in 2016 with the trend of smaller households, housing demand in urban areas would keep rising, especially the demand for social housing projects.

A senior expert of the Noruma Research Institution was quoted by the Vietnam Finance newspaper that the support policies for social housing development in Viet Nam remained ineffective as only a few people were lucky enough to be able to get access to preferential loans.

The newspaper cited statistics that 67 per cent of surveyed people aged between 25 and 40 did not own homes, and 60 per cent of them demanded one. Roughly 75 per cent said that they wanted a house but could not as they were financially incapable.

Experts said at a recent conference about housing issues in Viet Nam that the country needed long-term financial policies for social housing development as the government's VND30 trillion (US$1.34 billion) support package would end in June this year.

Viet Nam was urged to raise policies to support young people aged around 30, with medium incomes, to buy houses as those were in high demand.

Hidenori Hashimoto, a representative from the Japan International Cooperation Agency in Viet Nam, was quoted by the Voice of Viet Nam news website that Japan wanted to invest in social housing development for the youth in Viet Nam through official development assistance.

Accordingly, Japan and the banks might provide loan supports to those who were capable of paying back debts in five to 15 years. — VNS