The great gap between home prices and average income has led to serious issues.

The great gap between home prices and average income has led to serious issues.

The market also has just a limited number of social houses and houses for rent compared to the high demand. Still, the biggest burden is the unbelievable high price which is 20 to 25 times higher than household’s average income. In developed countries where the wealth gap is far more extreme, the numbers are only 5 to 7 times. Moreover, the government does not have a credit policy to support middle and low-income people to own homes. It seems that the life goal of owning a home is just a fading dream for these people.

According to data by the HCMC’s Department of Construction, the city has about 476,158 households who have no houses or living with their parents and relatives, accounting for 23.46% of the total households. In which, there are about 20,000 households who are cadres, civil servants and officials have no housing; 300,000 households wishing to rent social houses; and 143,000 households wishing to buy social houses. The number of household living in extreme conditions such as along canals has reached an alarming number of 21,000 while 35,000 households living in old apartments that need to be renovated, refurbished or relocated.

Currently, urban low-income people account for more than 50% of the population, including cadres, civil servants, public officials, workers, and immigrants. Among them, there are 274,622 workers and working in 17 industrial and manufacturing zones, 50,000 newlywed couples, and more than 500,000 college students, which adds to the housing pressure of big cities. Most of these people have demand for affordable commercial houses, social houses, and rental houses with affordable prices, especially 1-to-2-bedroom apartments with selling prices of around VND1 billion/unit, and 15-year installment term.

However, according to HoREA, the market is short in supply for this segment and lack of effective supporting policies from the government. In HCMC, the authority has been implementing a housing support plan for government officials and employees in term of preference bank loans, which is upto VND900 million at 4.7% interest rate and a 15-year installment term. So far, about VND1.5 trillion has been disbursed to more than 4,000 people (mainly in fields of health and education).

“This result is encouraging, but it requires greater resources to address more people and ensure fairness among cadres, civil servants and officials. The policy needs to be widely applied, not just in HCMC or to government officials. And if so, if it applied to all low-income people in purchasing their first home (affordable segment), it will contribute to ensuring social security and a sustainable development", a HoREA’s representative proposed.

 

Source: Lao Dong