Prime Minister Nguyen Tan Dung approved on November 30 a national housing development strategy up to 2020, with a vision toward 2030.
“It is the first time Vietnam has a national housing strategy with a long term vision and specific targets set for different groups in the society,” said Construction Minister Trinh Dinh Dung at a conference of the construction sector held this month in Hanoi.
The strategy states that housing development is a common task of the State, society and people, and the State will adopt appropriate policies to promote the real estate sector under the market mechanism while helping poor people own a home.
Ambitious targets
According to the 2009 population and house caucus, during 1999-2009, the total floor area of houses had doubled to 1,415 million m2, with more than 70 million m2 built each year.
The strategy sets a target that from now to 2020, about 100 million m2 of floor area will be built every year. At least 20% of floor areas in urban housing development projects will be set aside for social policy beneficiaries and low-income earners.
The average floor area per capita is set to increase from 16.7 m2 in 2010 to 22 m2 by 2015 and 25 m2 by 2020. In separate calculations for urban and rural areas, this figure will rise respectively from 19.2 m2 and 15.7 m2 to 26 m2 and 19 m2 by 2015, and 29 m2 and 22 m2 by 2020.
In Hanoi and Ho Chi Minh City, the proportion of apartments in housing development projects will reach over 80% by 2015 and 90% by 2020. These rates will respectively be over 50% and 60% for grade-I and -II urban centers and over 30% and 40% for grade-III urban centers.
Houses for rent, including houses built with state investment capital and houses built under state-supported commercial projects, will be further developed, accounting for at least 20% and 30% of total houses in urban centers by 2015 and 2020, respectively.
Solutions
In order to achieve the above-mentioned targets, the State will create favorable conditions for businesses of various sectors to invest in building houses for sale, lease or lease-purchase under the market mechanism, serving the group of better-off customers. Concurrently, it will adopt appropriate policies to support those facing housing difficulties but incapable of affording a home.
In light of this, a thorough revision of existing laws on planning, land and finance will be carried out to remove regulatory obstacles for housing development.
The strategy attaches importance to the forecast of housing demands and determination of housing development targets, saying that these indicators must be clearly identified in annual and periodical local socio-economic development plans for effective implementation and strict supervision.
In terms of land-related policies, the strategy stresses such matters as compensation for ground clearance, elaboration, appraisal and approval of land use master plans and plans and recovery of ineffectively used land.
Financial, credit and tax policies will also be further perfected to tap to the utmost domestic and overseas sources for the real estate sector, particularly raising medium- and long-term capital through issuance of government bonds and corporate bonds and establishment of housing and real estate investment funds so as to overcome the current shortage of capital and reduce reliance on bank loans.
As explained by Construction Minister Trinh Dinh Dung, a housing and real estate investment fund may take the form of real estate trust fund or housing development fund. A real estate trust fund is a fund that issues fund certificates to mobilize idle capital from individual investors for investment in the housing and property sector. It may pour 100% of raised capital into real estate and is eligible for tax incentives. Meanwhile, a housing development fund will be set up with proceeds earned from the sale or lease of houses under state ownership, land use levies collected from housing development projects, allocations from local budgets and other lawful sources. This fund will be used to create a publicly owned housing network which will help maintain the State’s role in the real estate market and provide soft loans to investors of social housing projects and social house buyers and lessees.
The strategy also puts forward some other solutions, including provision of incentives for rental housing developers, diversification of the forms and terms of house ownership and building of a computerized housing information system.
Speaking at the conference, Construction Minister Trinh Dinh Dung said his ministry would, in coordination with related ministries, sectors and localities, try its best to implement the strategy. However, success cannot be guaranteed without the active participation of the business community.
At present, there are around 36,000 construction businesses nationwide, with 97.9% belonging to non-state sectors while state-owned and foreign-invested enterprises accounting for only 1.6% and 0.5%, respectively. In 2010, the total construction turnover reached around VND 283 trillion, of which non-state sectors contribute VND 200 trillion, state-owned enterprises, VND 74 trillion, and foreign-invested businesses, VND 7 trillion, accounting for 71%, 26% and 3%, respectively. Construction and real estate businesses are currently carrying out a total of around 2,500 housing and real estate projects all over the country, occupying a land area of over 104,00 ha. Of these projects, some 1,400 are located in Ho Chi Minh City, about 800 in Hanoi, and approximately 260 in Hai Phong city.-