Viet Nam should raise policies to encourage the development of affordable rental housing in an effort to resolve the severe shortage of housing for low-income earners, experts said.— Photo vietnamnet.vn

Affordable rental housing projects, in fact, could be counted on the fingers of one hand, and could meet only a modest part of the demand. Applications for renting these apartments always outnumbered the available rental apartments.

Tran Hung, who wanted to rent an apartment at Ha Noi Housing Development Investment Company No 5's social project in Dai Kim Urban Area, was worried that he had limited opportunities as there were hundreds of applications but only 136 out of 630 apartments available on rent.

Vu Thi Lan Anh, deputy general director of CEO Group, was quoted by Kinh Te Do Thi online newspaper as saying that only 86 apartments of the group's Bamboo Garden social housing project were to be leased out at the intended price of VND48,000 per square metre per month. But the number of applications for renting homes was several times higher.

According to Nguyen Tran Nam, chairman of the Viet Nam Real Estate Association, this proved that there was a thirst for affordable rental apartments. However, due to the slow capital recovery and lack of incentives few developers were showing an interest, Nam said.

Property expert Dang Hung Vo said that affordable rental housing development had become critical for Viet Nam as many low-income earners could not afford a house even with preferential loans and many were not eligible for banking loans. Policies should be raised to encourage developers, he added.

According to the Viet Nam Federation of Civil Engineering Associations, in developed countries, rented homes often accounted for more than 40 per cent. In Viet Nam, people generally preferred to own a home rather than live on rent.

Economic expert Ngo Tri Long said that developing social rental housing projects would contribute to changing the Vietnamese habit of owning a house.

Long said that clear legal framework coupled with responsibilities of renters to be specified were needed to encourage property developers to invest in this segment.

Experts said that land was one of the biggest problems in developing affordable rental housing projects, given the limited land resources in urban areas.

According to the Ministry of Construction, by 2020, Viet Nam would need around 1 million apartments for low-income earners but the current supply was only at around 10,000 units per year.

At a meeting in 2012 of the Central Steering Committee on Housing Policy and Real Estate Market, the government stressed that priority should be placed on developing rental housing projects.

Under the Government's Decree 100/2015/NĐ-CP on social housing development and management issued on October 20, 2015, property developers of social housing projects which would be used for rent only could borrow up to 80 per cent of the total investments in up to 20 years. – VNS