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Capital shortage is impeding low-priced housing development, said Vu Thi Hoa, deputy head of the House and Real Estate Market Department of the Ministry of Construction.

Many enterprises have shown interest in housing projects for low- and middle-income people. However, Hoa said at a seminar on Vietnam's real estate market on Saturday that many obstacles remained.

Though the social housing development policy came out years ago, few property developers have taken part as it is hard to obtain bank loans for social housing projects.

Moreover, the Government's incentives are not attractive enough. Developers will incur losses if they cannot find buyers or tenants due to lack of government guarantees.

Low-income people like workers and civil servants cannot afford to buy condos worth VND350-450 million each and pay interest on loans for 15 to 20 years by installment plan.

Investors will have to increase condo prices due to high compensation rates or in the process of negotiating with families affected by their projects, especially in major cities, result, low-income residents will not be able to buy homes at high prices.

Le Duy Hieu from the Institute of Economics said a fall real estate prices would help income people buy houses but the market trend would prove it was hard to achieve.

Source: Saigon Times