Luxury homes left empty, low-income families left in the cold

In Vietnam’s urban areas there are many large, empty luxury homes, while low-income earners are in need of accommodation.

This was one of the problems addressed at a conference to seek the opinions of ministries and agencies concerning land use, through the year 2015 and planning through 2020.

Dang Hung Vo, the former Deputy Minister of Natural Resources and Environment, said many localities have allocated amounts of land for urban development, including the massive construction of residential areas, which exceed the permitted level, resulting in land waste.

Many of these residential areas have been left empty for years after construction, including Quang Minh urban area, which is the site of over 300 luxury houses in the Me Linh District of Hanoi.

The 40-ha area came online in 2006, but to date, 90% of it remains unused.

Throughout the city, 35% of luxury homes have remained vacant for several years, according to an inspection by the Ministry of Construction’s Housing and Real Estate Market Management Department and the Hanoi Department of Construction carried out in April.

The main reason for this problem has been years of speculation in the Hanoi’s real estate market, along with lack of infrastructure, such as schools and hospitals to support such large residential areas, said Vu Xuan Thien, Deputy Head of the Housing and Real Estate Management Department.

Another problem has been the increase in licensing of golf courses and large resorts. For many localities, the priority has been to attract investment. Often, though, the priority of investors is to sit on the property until they have a chance to sell it at a profit.

Le Quoc Nhung, Former Deputy Head of the National Assembly Economic Committee suggested that more careful consideration of projects be made before making land allocation decisions.

He also pointed out the modest amount of land set aside for low-income housing.

In a recent interview with Tien Phong, Deputy Minister of Construction Nguyen Tran Nam said, currently, of all the residential space in Vietnam, apartment blocks, which tend to be more affordable account for only 6%. Hanoi’s rate is higher, at 16%, but Ho Chi Minh City comes in at lower than 6%.

A large number of houses from 120 to 200 square metres have been built in big cities. These can be priced at anywhere from VND40 million (USD1,923) to VND100 million (USD4,807) per square metre. This places them far out of the reach of low to middle income people.

Nam added that, in its long-term administrative plans, Vietnam plans to restrict the development of luxury and semi-detached homes and increase the construction of apartment blocks to 80% of new residential projects.

Source DTINews

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market