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Construction sector urges gov’t to fund low-income housing   0000-00-00 - Viet Nam News

Construction and real estate experts have recommended the Government provide more flexible policies to encourage more investment in low - and-mid-range housing.

Real estate experts believe that besides helping low income earners to buy homes, the move, if approved, would also remove difficulties for the construction materials industry, which is facing a downturn in the wake of the global financial crisis.

Experts said now was a golden opportunity for the Government to encourage construction, as the supply of construction materials has been exceeding the building demand. Falling demand has led to low material prices, especially for steel.

A tonne of steel currently sells for roughly VND14 million, down from VND19 million a few months ago.

The General Director of the Hoa Binh Construction and Property Trading Joint Stock Company, Le Viet Hai, believes that at this time, when high-end apartment projects are not selling well, real estate investors will happily invest in housing for low income earners if incentives and capital were available.

Hai estimated that construction prices for low- and-mid-range housing would fall roughly 20-30 per cent if the Government issued an incentive policy.

A low cost 30sq.m apartment in HCM City costs around US$20,000 at present. The price could be even lower if the Government provided real estate investors incentive policies, including tax incentives, said Hai.

The Chairman of Indonesian FIABCI (International Real Estate Federation), Ir.F.Teguh Satria, also recommended the Government consider implementing a low income housing policy like that of Indonesia.

Government incentives had helped Indonesian investors provide over 100,000 low-end homes over the past two years, he said. Satria said that apartments in a six-storey building without an elevator offered 21-36sq.m apartments at a cost of around $15,000 each. The price of land in HCM City was similar to that in Indonesia, he said, at around $1,000 per sq.m.

The Indonesian Government applies incentive policies, such as exemption of value added tax, and a reduced construction tax rate of 1 per cent, from the standard 5 per cent, according to Satria.

The HCM City Real Estate Association has also recommended the Government revise the Housing Law to help investors take part in low income housing projects.

Current regulations state that apartments of less than 30sq.m are illegal.

Real estate experts believe that besides helping low income earners to buy homes, the move, if approved, would also remove difficulties for the construction materials industry, which is facing a downturn in the wake of the global financial crisis.


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