People queue overnight to buy social housing

The scene has been the same ever night and day since the developer began receiving applications for the project.

After visiting the place twice but returning home empty-handed again on April 20 because only 40 applications are accepted per day, Duong Minh Luat, a 28-year-old man from the rural district of Phu Xuyen, decided to leave home at midnight to try to register a third time.

Since their marriage three years ago, Luat and his wife, a teacher, have traveled nearly 80 km every day between their workplace in the urban district of Cau Giay and their home in the countryside.

Despite a modest salary of over VND6 million ($254) a month per person, the young couple want to buy an apartment, hoping to end the cycle of staying up late getting home and getting up early to go to work.

Having some VND400 million in savings, they plan to borrow about 70% of a social housing apartment’s value.

“We can afford an apartment priced a little more than VND1 billion. If prices are more than VND2 billion, we don’t know when we can buy,” he said.

People wait early on the morning of April 20, 2023 to submit documents to buy social housing apartments. Photo by VnExpress/Viet An

Pointing to a cloth bag at his side, Hoi, a 34-year-old migrant worker, said inside there are some 10 types of documents required for industrial park workers who apply for social housing purchase. They include a social housing purchase application, certificates and documents of residence, housing status, and social insurance payment.

It took Hoi nearly 20 days to go to the ward People’s Committee, the ward police station, the social insurance agency, and the notary office to complete the set of documents.

However, he is not sure that his application is complete.

“Hopefully there is enough time to fix the application if there is something wrong,” he said, noting that the deadline for the first round of application submission is May 11.

For the past 10 years, Hoi and his wife, a preschool teacher, have lived in a rented house with their two daughters.

The couple’s combined monthly income is some VND20 million, so they can save only a few million dong a month.

As their children grow up, living expenses grow bigger, as does their dream of owning an apartment.

People wait their turn to apply for social housing purchase on April 11, 2023. Photo by VnExpress/Viet An

Although he arrived two hours before opening time, Hoi was 43rd in line for applications that day. The day before, he came at 7 am and was 70th of the list.

Around 8:30, the lobby of apartment N09B1 was full of people who then formed a line out the door and down the block

“Those who are sitting here could be your neighbors in the future, so please love each other beginning now,” Hoi joked with other applicants.

The Hanoi Department of Construction last month announced the receipt of applications for renting and buying social housing apartments at NHS Trung Van project.

The project’s developer announced the selling price is VND19.5 million per square meter, including value-added tax.

To own the smallest apartment with an area of 69.9 square meters, buyers need to spend more than VND1.39 billion. The largest apartment, with an area of 76.8 square meters, costs some VND1.5 billion.

Selected buyers will have to pay VND50 million in advance, then pay six more installments.

The NHS Trung Van project included 32 floors and 275 apartments, including 225 social housing and 50 commercial ones.

For this first phase, the developer has opened 157 social housing apartments for sale and 68 apartments for lease.

Nguyen Hoa Hong Nhung, deputy general director of NHS Construction Investment Joint Stock Company, the project’s developer, said the company has received over 400 valid social housing applications.

Latecomers find it difficult to submit documents because the project’s developer receives only 40 per day. Photo by VnExpress/Viet An

The NHS Trung Van project attracts buyers because of its convenient location in an urban district, surrounded by large urban areas and available public utilities such as an elevated train route and major hospitals.

Of the 13 social housing projects expected to open for sale this year, the NHS Trung Van has been the first to do so.

Hanoi has few new real estate projects and affordable housing units.

According to real estate consultancy Savills Vietnam, last year the city only built 12,600 new apartments, the smallest number in the last eight years, and more than 80% of them were in the mid-rage segment.

The average new price of such units is VND47 million.

A January report of the Ministry of Construction showed the number of new real estate projects in 2022 continued to decrease over 2021, meaning supply for low-income earners is still limited.

Ha Quang Hung, deputy director of the Housing and Real Estate Market Management Agency, said many businesses are not interested in developing social housing mainly due to complex and cumbersome investment procedures.

The lending interest rate for social housing construction has recently been reduced to 12% from 14%, but it is still considered “too high, unsuitable,” he added.

According to economic expert Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, the process and procedures for implementing social housing projects are much more complicated than those for commercial housing ones. It takes 4-5 years to complete them.

Social housing sale and purchase procedures are also complicated, Luc said.

Buyers must satisfy many criteria and conditions such as housing, place of residence, and income documentation. It takes a lot of time and effort to get relevant documents certified.

Vietnam is forecast to need 2.4 million social housing units by 2030. Of 2.7 million workers in industrial parks, 1.2 million do not have houses.

The country only has 155,800 units for workers and social housing.

Although the winning chance is slim, Hoi still wants to try his luck because he is tired of living in a rented house, and wants to provide more convenient accommodation for his children.

“I heard that there have been thousands of applications submitted. I don’t know if I can pass the qualifying round to enter the draw round (a lucky draw will be held because social housing apartments are outnumbered by purchase applications),” the migrant worker said.