Trinh Dinh Dung, the Minister of Construction, met with real estate companies on October 25 in Hanoi, to discuss ways to boost growth and resolve the many difficulties plaguing the real estate sector.
|Construction site of Dai Thanh apartment block in Hanoi (Photo: SGGP)|
This crucial meeting was also attended by representatives from the People’s Committee of Hanoi and other relevant ministries and central departments.
According to Minister Dung, Hanoi has handed over 20,000 hectares of vacant land to real estate businesses to implement their projects. However, most companies have not been able to start or complete these projects.
Mr. Dung said that if these projects are not vital, they should be scrapped or temporarily shelved.
For those projects which are near completion, he proposed that investors switch to social housing instead of commercial apartments as this will help in meeting the housing demand of low income groups besides also being exempt from land usage fee.
He encouraged businesses to divide unsold apartments into smaller sections so that low income people can afford to buy a smaller and cheaper space.
However, the Hanoi Department of Planning and Architecture disagreed with the above proposal as this measure could face some difficulties. For instance, an elevator can serve four to six apartments and if the apartments are divided into 10 or 12 sections, the elevator will be perpetually overloaded. Basic infrastructure management and logistics will also become difficult and out of control.
Minister Dung said that Hanoi has about 2,400 apartments in stock at the moment. Though this is not a large number, these apartments are scattered across urban areas. Division within these apartments will not cause much pressure on the planning if done with management of proper logistics in mind.
The Ministry of Construction is preparing a proposal for the Government and the State Bank for creating better and more advantageous policies to help real estate companies overcome difficulties and revive the sector.