A chep apartment for workers in Bac Ninh province (Photo:VNA)

Hanoi (VNA) - The local real estate market has recovered but the State should provide policies to develop small and cheap apartments due to increasing demand, according to the Vietnam Real Estate Association (VNREA).

The association submitted proposals to the National Assembly on the local real estate market after its congress in October.

The local real estate market has recovered strongly and contributed to socio-economic development, the association said. The market has good liquidity, a stable increase in volume and value of transactions as well as quality of products. Credit for real estate has stood at a reasonable level at 8.5 percent of total outstanding loans of credit organisations and bad debts have reduced.

In addition, the number of real estate enterprises has increased and property projects have been developed in all segments with financial support from the State’s package of 30 trillion VND. That has aided the property market and supplied homes for thousands of families.

However, VNREA says the market still has risks such as an unbalanced goods structure. Demand from the majority of people was mid- and low-end houses while most projects on the market are high-end.

The market lacks products with prices suitable to many people’s finances, it says. Hanoi and HCM City have had a small number of new apartments priced under 20 million VND per sq.m, reports BizLIVE online newspaper.

The development of property projects, especially in large cities, has not been based on demand in each locality, it says.

The development of social housing has been slow because funds and policies related to social housing have not been fully resolved or not met demand.

Information and data about the real estate market has not improved, the association says. Market forecasts are lacking, affecting the Government’s management and investors decisions.

VNREA proposed methods to promote funds for social housing development and to implement policies of the Law of Housing for the need for housing of low-income people and industrial zone workers.

Ministries, related sectors and the State Bank of Vietnam should have reasonable credit regulations to avoid huge credit concentrating on one segment or some investors, it says.

The association proposed the National Assembly Standing Committee permit the continued implementation of policies on encouraging the development of commercial houses with small area, under-75-sq.m apartments, and low selling price at under 15 million VND per sq.m.

The policies included reduction of value added tax and corporate income and priority in approaching to investment capital. The association has proposed differences in tax rates as well as land and credit policies between high-end𓃲 commercial housing projects and low-price commercial housing projects.-VNA