The social housing paradox: High demand - low supply, why? –Part 1: Buying a social house: Like dry fields waiting for water! There are policies, pri

	Necessary to remove the legal problems in investment and real estate business
	It is necessary to have a specific solution to recover the real estate market
	The real estate market is growing unstable

Urban social housing projects are not enough to meet the needs of low-income people. In the photo: Social housing area in Tien Duong commune, Dong Anh district, Hanoi city. Source: Internet.

While many low-income people are in need of housing, the preferential policies for social housing are quite large, but it is not easy to get a share of social housing in the context that this segment is somewhat leveled off, the project was implemented less and less when incentives for home buyers and developers were no longer maintained.

As a result, many people in need of social housing still find it difficult to access this segment.

Trouble buying a house

As an investor looking to buy a house in the project of social housing IEC (IEC Residences) of the investor is the Joint Stock Company for Construction Investment and Electrical Engineering IEC in planning box B3-2 in urban subdivision S5 at TuHiep commune, Thanh Tri district, we were approached by a staff of a real estate floor and offered to register to buy an apartment. This employee said that the IEC project has three buildings with 1,170 apartments, the number of apartments for sale is 933 units, the number of apartments for rent is 234 units (accounting for 20% of the residential floor area), selling price is nearly VND16 million/m2 and thetransaction floor has been authorized by the investor to distribute a number of apartments in this project.

Because the location of the project is relatively beautiful, affordable, withfacilities and fast deployment speed, the staff of this real estate floor affirms that currently small apartments (53m2 and 64m2) and the bigger ones (77m2 with three bedrooms or corner units), customers will not be able to buy because most of them are for "diplomatic purposes", or have been sold in the first sale of this project, for the rest of the units (mostly 70m2), if you want to be sure that 100% of the draw will win, customers have to spend VND60-80 million/unit difference, the specific difference depends on the location of each apartment.

At another real estate trading floor, the staff here saidthat currently the number of registration documents to buy at the IEC project is quite large, so it is very difficult to draw the right to buy an apartment. It can be said that the apartment may not be drawn according to expectations about the area as well as the direction of the house and the number of floors. Meanwhile, if you accept to lose the difference, this real estate floor even ensures that customers can "combo" – choose a house, choose a floor, choose the direction – that is when customers register to buy a house through the floor will know exactly which apartment theywill be buying.

According to this employee, in case the lottery is not in accordance with the original commitment, the customer will be compensated the corresponding difference. The difference that this exchange staff gave ranged from VND50 million (for a 70m2 apartment located next to the elevator, with frequent passersby), to VND70 million (for a 70m2 apartment in the middle), while the cornerapartmentsare up to VND150 million.

According to data from the Ministry of Construction, the country has now completed 248 social housing projects with more than 103,500 houses, a total area of ​​nearly 5.2 million m2, only achieving about 41.4% of the target in the National Housing Development Strategy to 2020 is 12.5 million m2 of housing.

Thus, there is a fact that the demand of people for the social housing segment is very large, but due to the number of social housing projects that have not met the demand, customers want to buy a house often accept to pay a difference. The difficulties that people face when looking to buy social housing come from many reasons. According to many people, it is very difficult to buy a house that meets the needs, first of all due to the low supply, especially when the supply is relatively convenient, near the central area and with synchronous infrastructure. With these projects, the number of applications is many times higher than the number of apartments inthe project. Even the project location is not necessarily beautiful, but due to the low supply, the large number of registration documents leading to the ability of people to buy houses is not ensured.

Maze battle

Mr. N.V.T, a customer in Ha Dong, recalled that in 2010, Hanoi opened the first social housing project, CT1 Ngo Thi Nham project (Ha Dong). With the price of nearly VND10 million/m2, the project has only 328 apartments but has more than 5,000 registration documents. After checking, there are nearly 1,200 applications eligible to be drawn and his family is lucky to be on the list.

"With this high rate, really only the lucky can have a home. For us, winning the house at that time was no different than winning the lottery. However, my unlucky family was among them. It took six years for us to officially buy a house in another social housing project in Ha Dong, ending the long lease term,” N.V.T said.

That was 10 years ago. Currently, the number of social housing projects has increased, however, the high demand makes the supply not enough to meet demand. In addition to the small supply, the financial ability of homebuyers, completing the application process takes a long time, not being supported with preferential loans are the difficulties that homebuyers have to face.

Speaking about the difficulties in the journey to buy a house, Ms. L.H.V said that in 2019, she registered to buy a house at the Ecohome3 project. Due to limited finance, she only wanted to buy a small 45m2 apartment. However, due to the large number of registration documents to buy the project, in order to make sure she can buy a house and buy a small area, she is forced to accept the difference of VND65 million from the floor. The difficulty did not stop there, because buying as a singleperson, her application was not a priority for the investor of Capital House. After that, she had to switch to buy an apartment in the building of the second investor of the project, Bac 9 Company.

Currently, one of the major difficulties of low-income people when buying houses in social housing projects ishaving to borrow from banks with high interest rates. Sincethe end of 2016, after the package of VND30 trillion of concessional loans ends, accessing concessional loans has been extremely difficult.

“I have learned to apply for loans at the Bank for Social Policies with an interest rate of 4.8%/year, but the procedure is very complicated and messy, due to local verification with many levels. Besides, due to limited capital, the bank also only lent from VND100-200 million, while I need to borrow VND500 million. Therefore, I have accepted to borrow from BIDV Bank at the interest rate of 8.8%/year in the first two years, plus 3.5% in the following years,” said L.H.V.

A little luckier, Ms. NQN, a homebuyer at the Hope Residence social housing project (Long Bien, Hanoi), said her family registered to buy a house in this project for more than VND16 million/m2. Because the number of registration documents and the number of apartments for sale are similar, she does not have to lose the difference, but the home loan interest rate at the rate of the commercial house is 7.5% in the first two years, the following years has afloating rate (usually at the average of 24-month savings rates plus a 3-4% margin).

Not to mention, there are actually people paying money, but the project is behind schedule, causing people not to receive houses on time. Like The Bright social housing project (Kim Chung commune, HoaiDuc district, Hanoi), according to the commitment, the apartment was tobe handed over to customers in December 2017, however, the project did not hand over the houses. True commitment makes life and activities of homebuyers face many difficulties. By mid-2019, this project will only hand over houses to customers in terms of infrastructure and fire protection, not completed, the work is still in progress.