Vietnam to ease rules on low-cost housing

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Motorcyclists ride past a real estate development on the outskirts of Hanoi

The Ministry of Construction has said it will ease eligibility criteria for buyers of government subsidized housing as public interest in low-cost apartments remains high amid an overall gloomy real estate market.

The new policy, expected to be submitted to the government at the end of the month, will allow people with a monthly income of up to VND9 million to buy the so-called "social housing," compared to VND4 million now, local media reported Thursday.

It will also cut short the compulsory ownership period from 10 years to five years before a low-cost home can be sold to a new buyer.

"A larger group of eligible buyers and a shortened ownership period will attract many homebuyers," news website VnExpress cited Deputy Minister Nguyen Tran Nam as saying.

Developers of low-cost housing projects should keep prices under VND10 million per square meter, he said, adding that basements and kitchen cabinets, for instance, are not necessary. 

"Standards for low-income housing are now too high"¦ We only need to build basic homes that are safe and functional to have low prices. The point is to give people their own home first, then they can upgrade it themselves," he said.

Vietnam has launched several affordable housing projects over the past three years. Developers of these projects receive tax incentives and interest rate subsidies from the government to minimize construction costs, but more often than not their prices are criticized for still being to high. 

While strict criteria have been applied to make sure the houses end up with the right buyers, there have been reports that some apartments developed for the poor were offered to better-off buyers.

Deputy Minister Nam, however, said overall the program helped the right people buy homes and violations were rare.

"I believe the procedures are strict and closely monitored and it's impossible for the apartments to be freely traded or rented on the market," he said. 

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