HCM City has asked relevant organisations to accelerate social housing development following Prime Minister Nguyen Xuan Phuc’s directive to build homes for low-income earners.

The task has become urgent as the southern city faces a shortage of affordable homes.

Demand for affordable homes in the southern city might amount up to one million units within the next decade, according to Le Hoang Chau, president of HCM City Real Estate Association.

Chau estimated the city’s population had reached nearly 13 million while the official figure was just 8.3 million. “I think demand for affordable homes in HCM City is being underestimated.”

More than 20 per cent of the city’s population are immigrants, plus more than 400,000 students and 50,000 newly-married couples every year, according to Chau.

Chau cited statistics of the HCM City Institute for Development Studies that 500,000 families in the city did not own houses and 81,000 would be in need of social housing units from 2016-20.

The market was short of apartments priced below VND1 billion (US$44,500) per unit, Chau said.

Under the municipal Department of Construction’s social housing development plan, by 2020, the city plans to develop 39 projects with a total of 45,000 apartments, two thirds of which would be completed and put into operation within the next four years.

In 2017, four social housing projects with a total 1,654 apartments are expected to be completed.

VND100 million apartment: feasible?

According to Chau, HCM City could build apartments with area of 30 sq.m each at selling prices of VND100 million ($4,500) per unit like those in southern Binh Duong Province.

Low-cost apartments should be developed in areas with traffic and social infrastructure and near to industrial zones.

The association recommended that those projects be built in Linh Trung Processing Zones, Quang Trung Software Park, and HCM City National University, with about 10,000 apartments in total.

Previously, HCM City asked the municipal Department of Construction to study the feasibility of VND100 million apartments in the city.

These apartments were developed successfully by Binh Duong Province where there was high demand for affordable homes for workers.

Tran Trong Tuan, Deputy Director of HCM City’s construction department said that the city could build VND100 million apartments if there was available land and infrastructure.

“However, this is not the best solution for the city,” Tuan said, adding that this apartment model was only suitable for industrial zones.

In addition, these apartments could affect the city’s urban development, Tuan said. “There should be various types of affordable homes to match demand,” he said, adding that the prices could vary from VND500 million, VND600 million, VND800 million and to more than VND1 billion. “Not every low-income earner wants a VND100 million apartment,” he said.

At the end of January, PM Phuc issued a directive to boost social housing development to fulfill a goal set in the National Housing Development Strategy to 2020 with a vision to 2030.

The national housing development strategy aims to build 250,000 apartments for poor, low-income earners. However, by the end of 2016, 179 social housing projects were completed, only 28 per cent of the goal.

In the directive, Phuc asked agencies to improve housing quality while lowering prices and encouraging investment in social housing development.

Nguyen Van Lam, president of Ha Noi Urban Planning Association, said that the Government should bear land-related costs for social housing developers to lower home prices.

According to the HCM City Real Estate Association, attention should be given to the prices of apartments in the city amid an imbalance in supply and demand to prevent intermediaries from pushing up prices unreasonably. — VNS