On November 13th, the Ho Chi Minh City Real Estate Association (HoREA) hosted an event connecting several Japanese companies and groups, including the Japan Housing Finance Organization (Japan Housing Finance-JHF), Sekisui Heim Japan, Thai SCG – Heim Japan, and prominent Vietnamese real estate companies.
Mr. Le Hoang Chau, Chairman of HoREA, mentioned that Vietnam has embarked on a mission to develop 1 million social housing units, with a particular focus on eradicating temporary housing and rehabilitating 400,000 substandard homes. According to initial surveys, Ho Chi Minh City requires 200,000 social housing units, and 60% of immigrants, workers, and laborers aspire to long-term rentals.
Japanese corporations and Vietnamese real estate companies networking at the event.
Between 2016 and 2020, Ho Chi Minh City achieved nearly 70% of its planned target, and in the 2021-2025 period, it reached only 2.9%. Currently, the city is executing eight social housing projects, offering almost 6,400 units. Many immigrant workers and laborers reside in rented accommodations. The city has over 61,000 boarding houses, providing shelter for approximately 1.4 million people across 560,000 rooms.
In 2020, Ho Chi Minh City introduced nearly 17,000 affordable housing units to the market. However, in the subsequent three years, the focus shifted primarily to luxury housing developments.
Representing SCG Heim (Japan), Mr. Ryuji Saimon expressed his company’s keen interest in collaborating with Vietnam to develop affordable and social housing. Currently, his company specializes in prefabricated homes. Their Thai factory employs modern techniques, enabling them to export houses to Vietnam, with 80% of the structure pre-assembled, leaving only 20% to be completed on-site.
However, according to Mr. Le Hoang Chau, this model is more suitable for rural areas and the government’s ongoing initiatives to eradicate temporary housing and rehabilitate substandard homes. Nonetheless, cost remains a critical consideration.
Mr. Le Hoang Chau emphasized that foreign investors currently benefit from substantial tax incentives, including a reduction of up to 50% in corporate income tax and value-added tax. HoREA is advocating for an increase in this reduction to 70% for social housing projects. Additionally, preferential credit terms are available, offering rates as low as 4.8% for tenors of 10 to 15 years for investors and up to 20 years for homebuyers.
Regarding land access, there are no restrictions on area as long as the project aligns with the city’s master plan. The government has instructed Ho Chi Minh City to allocate suitable land parcels for social housing initiatives, which is expected to attract more businesses to participate.
Mr. Le Hoang Chau affirmed that Vietnam is committed to engaging private entities and corporations in the development of social and affordable housing. To that end, the government is actively facilitating the resolution of challenges and obstacles faced by 60 ongoing projects in this sector.
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