HCM-based real estate businesses show low interest in social housing

Le Hoang Chau - Chairman of the Ho Chi Minh Real Estate Association (HoREA) said the existing social housing projects mainly derived from 2009 to 2014, when the real estate market was frozen and developers changed commercial housing projects to social ones.  

The fact that most social housing projects in HCMC have had bad prestige
makes property companies not want to develop this kind of housing. 

Recently, construction of these projects has been started. In May 2016, HCM government approved 2 new social projects including: apartment project  CC1, developed by Construction No.1 Co. Ltd on Nguyen Van Dung Street (Go Vap District) and a residential-commercial complex, developed by Phuc Phuc Yen Investment Co., Ltd in Tan Thoi Nhat Ward (District 12). 

According to Nguyen Nam Hien - General Director of Hung Thinh Real Estate Company, the reasons why businesses have less interest in social housing development includes limited land resource, high investment costs but low profit and lack of effective supporting policies from city authorities.  

A representative of Himlam Land, which is the developer of affordable housing project in Phu Dong, said, although the price of apartment in the project is only VND1 billion  per unit, it is still a commercial housing project, not a social one. 

He said: "We lower price of our apartment project just because its location is far away from the city center. However, it’s still sold as a commercial housing project. Developing a social housing project may harm our reputable brand.”  

The fact that most social housing projects in HCMC have had bad prestige makes property companies not want to develop this kind of housing. 

Besides, due to different opinions among ministries and agencies, the implementation of governmental policies for social housing under the 2014 Housing Law are being obstructed. According to Le Hoang Chau, this is another reason why real estate business have shown low interest in social housing.  

Source: VOV