Major property developers set their sights on social housing

By Dat Nguyen   May 26, 2024 | 03:28 am PT
Major property developers set their sights on social housing
A social housing project in northern Binh Duong Province. Photo by VnExpress/Quynh Tran
Tens of thousands of social housing units are planned to be built with major upmarket developers all set to enter the affordable segment.

Developers Hoang Quan Group and Novaland have signed an agreement to build social housing in HCMC and southern provinces, and have a target of 3,000 units this year alone.

The provinces of Binh Thuan, Dong Nai, Binh Duong, and Long An are among their target locations.
Hoang Quan chairman Truong Anh Tuan told shareholders at a meeting earlier that the company plans to develop at least 50 social housing projects with approximately 50,000 units in HCMC, Dong Nai and Long An by 2030.

It is now looking for lands for these projects, he added.

The collaboration with Hoang Quan also marks Novaland's entry into the social housing segment. It has mainly been developing high-end commercial and resort projects thus far.

At a conference with Prime Minister Pham Minh Chinh, the Novaland management declared its readiness to build 200,000 social housing units in the southern region.

Hanoi Construction Corporation (Hancorp) announced plans to build nearly 10,000 social housing units in localities like Hanoi and Ha Nam and Dong Nai provinces in a communication it sent to shareholders this month.

Hancorp belongs to the Ministry of Construction and has developed numerous housing projects near Hanoi’s West Lake.

Vietnam’s biggest property developer Vinhomes has begun work on four social housing projects with more than 10,000 units in Hai Phong City and the provinces of Thanh Hoa, Quang Tri and Khanh Hoa.

Vingroup is also completing legal procedures to commence other projects in Hanoi, Hung Yen, Ha Tinh, and HCMC.

Tran Ngoc Anh, deputy CEO of Viglacera Corporation, a manufacturer of construction materials and property developer, said his company has completed 5,000 social housing units, primarily in Hanoi, and building more than 10,000 others in four northern provinces, Bac Ninh, Quang Ninh, Ha Nam, and Phu Tho.

Some 3,000 units are ready to be sold at VND8-10 million ($314-392) per square meter, he added.

Nguyen Hoang Nam, CEO of property developer G-Home, told VnExpress that the 2023 Housing Law provides incentives for social housing such as waiver of land use fees if they do not use government funds.

They also get incentives related value-added and income taxes. Developers are therefore keen on social housing, he said.

Although profits from social housing projects are capped at 10%, they keep developers’ operations going, he added.

Le Hoang Chau, chairman of the HCMC Real Estate Association, said while some believe real estate companies are reluctant to develop social housing, this is not entirely accurate.

Recently several large companies have registered to build a total of over 1.5 million apartments, he said. "The participation of many large investors has breathed life into this segment."

But the VND120-trillion loan package meant for social housing has been disbursed slowly and its interest rates are too high for both developers and buyers, he said.

He said the ideal interest rate should be 4.8-5%. He also proposed increasing the regulated profit margin cap from 10% to 15% to attract more developers.

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