The HCMC Department of Construction said city authorities had set a target of carrying out seven projects with 10,000 units, and joining hands with private sector property developers to build another 20,000 units.
The department said around 33 companies had registered to participate in a housing development program with 14,000 units. The city government has given approval to six developers to develop some 8,760 more units.
Among the projects underway are Hanh Phuc with 672 apartments in Binh Chanh District which got off the ground in June last year, Thanh Loc with 336 units in District 12, Vinh Loc A with 1,400 units in Binh Chanh District, Truong Tho in Thu Duc District and Minh Thanh in Hoc Mon District.
According to the Construction Department, supply of low-cost housing has yet to keep pace with rising demand.
One of the reasons is the lack of attractive incentives for investors to get involved in this segment. Difficulties in finding land, clearing sites, making compensation for affected families, and gaining access to bank loans also discourage property companies from venturing into low-cost housing projects.
Unlike commercial projects, low-cost condo projects have found it hard to ask buyers to advance money. Meanwhile, if investors choose to lease out their apartments or allow buyers to pay by installment, it will take them a long time to recoup their investment capital.
To deal with the financing issue in low-cost condo projects, Vietnam Development Bank with a fund worth VND6,600 billion has listed 44 housing projects that can get preferential loans. However, just five of them have succeeded in taking out loans from the bank.
The city’s Construction Department proposed the Ministry of Construction to give clearer guidance to support the low-priced housing segment, and extend financial support to potential buyers.