VND100m homes a low-income dream

At the beginning of this month, Becamex IDC launched nearly 5,000 apartments, with a total area of 30 square metres each in the Hoa Loi social housing project, which have been priced between VND100-150 million ($4,630 - 6,950) per unit. — Photo goctinnhanh

HA NOI (Biz Hub) — Affordable housing that was recently launched in the southern Binh Duong Province at a price of about VND100 million (US$4,630) per unit has made low-income earners and workers more hopeful.

Buyers could pay 20 per cent of the total value of the apartment in advance and get loans from the Government's VND30 trillion ($1.38 billion) support package for the property market and pay the remainder in instalments every month.

Nguyen Thi Lan, a worker in Binh Duong Province, who is from the Nghe An Province, has bought an apartment in the Hoa Loi housing project. She said the monthly instalment was only equivalent to her rent of VND1.4 million ($648) per month for seven years. "I am happy now that my family has a home of our own," Lan said.

Meanwhile, Nguyen Thanh Truc, chief of the secretariat of the provincial People's Committee, said there were a sizeable number of workers in the province, who had expressed the need for accommodation. Many social housing projects were implemented in the province with the aim to provide low-income workers with a stable accommodation and help them settle down and improve their living standard.

As part of the province's social housing project, Becamex would develop 64,700 units for low-income earners in the province.

Is this possible in major cities too?

If successful, Binh Duong's social housing projects might set an example for other provinces in the country, especially Ha Noi and HCM City, where there is huge demand of homes for low-income earners, experts said, adding that however, it would be difficult to match these prices in big cities.

According to Le Hoang Chau, president of the HCM City Real Estate Association, the cost for developing a land fund for social housing projects, which accounts for a large portion of the construction costs, was much lower in Binh Duong Province than in Ha Noi and HCM City.

Binh Duong Province had created a land fund totalling about 200 hectares with a basic infrastructure system to develop the social housing projects.

Nguyen Van Duc, the association's deputy president, said higher costs for site clearance in Ha Noi and HCM City had pushed up the prices of social apartments, which currently ranged between VND8-15 million ($372-714) per square metre.

Duc said the land fund was the first factor to influence the affordability of apartments.

Experts said land in the cities' outer districts had lower prices, which would be suitable for developing a land fund for social housing projects. However, this area must be equipped with basic social infrastructure, such as schools, stores, banks and hospitals.

According to expert Dang Hung Vo, small-sized apartments, if placed under good management that ensured basic infrastructure requirements, such as parking space, parks, security and fire prevention, would not turn into slums, but help enhance the living standards of low-income earners.

Experts estimated that the prices for similar apartments would be around VND200- 300 million ($9,523-13.953) in Ha Noi and HCM City, owing to higher construction costs.

In the latest draft decree on social housing development and investment issued by the Ministry of Construction, the minimum area for social apartments has to be 25sq.m. — VNS