Saturday, August 29, 2009

Housing Price in Hanoi so steep, few can afford

Housing prices are so steep in suburban Hanoi that few people will ever be able to buy a place of their own.

A worker at her rent house in Hanoi.
The average income in the national capital is between VND10 million and VND15 million, while the cheapest dwelling of 50 square meters costs VND300 million, according to the Hanoi Socioeconomic Research and Development Institute.

“That means a person would have to work for 25 to 30 years, and spend nothing in that time, to save up for a house,” the institute’s head, Nguyen Dinh Duong, said at a conference held by the Hanoi Construction Association on Friday.

“So a huge number of urban residents will never buy a home.”

The alternative, renting, is nearly as big a problem.

There are now 55 industrial zones in Hanoi, but almost none supply accommodation for their workers, Do Quoc Tuan, deputy director of Hanoi Construction Department, told the audience.

According to his department, only 30 percent of state workers have been provided with housing, and the college and university dormitories can barely accommodate 20 percent of the city’s 800,000 tertiary students.

Hanoi will need investment of VND43.5 trillion to build enough housing for 60 percent of the students, 50 percent of the workers and five percent of low-income earners in the built-up area by 2015, Tuan said.

His superior, Do Xuan Anh, said the task ahead was beset by “difficulties with policies to develop home funds and ensure investors get their money back.”

“Housing development efforts are yet to meet the demand of young laborers and young married couples,” he said.

In Hanoi so far this year, construction of 800 houses for low-income earners has begun in Long Bien District, and plans have been made to build housing for college students on nearly six hectares of land in two new satellite towns in Thanh Tri and Tu Liem districts.

Duong said housing could be made more affordable by reducing the average area to 30 square meters or less and using inexpensive building materials.

Nguyen Trong Ninh, deputy head of the Housing and Real Estate Management Department of the Ministry of Construction, suggested the government either invest directly to build housing for rent to low-income earners, or supply property developers with land to do the same.

Duong gave the idea his support and suggested the housing problem might be eased if low-income earners accepted the idea of renting and gave up all thought of ever owning a place of their own.

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