Vietnam’s fast pace of urban development is shifting toward affordablehousing, said the Vietnam Investment Review on March 19, adding that thecountry’s strategy should be analysed carefully to avoid slums likeother cities.
According to Victoria Kwakwa, World Bank countrydirector in Vietnam, the country is undergoing a process of rapidurbanisation with nearly a million people moving to cities per yearputting an immense pressure on housing demands.
“This growth isexpected to generate enormous new housing demands, especially in the lowand middle income segments due to large scale rural-urban migration,”Kwakwa was quoted as saying at a seminar held in Hanoi last week toshare experiences with Vietnam about the development of affordablehousing.
Kwakwa said Vietnamese authorities should better defineand understand the housing deficit for poor urban households – thebottom 40 percent or those below the median income.
“In thiscontext we believe it is important to also consider the housingconditions of migrants, not only those of officially registeredresidents. It will also be important to think of ways of formalisingthose living in informal settlements. Vietnam is fortunate to not havethe large slums seen in other large cities such as Manila or Jakarta,”she continued.
“Given the rate of rural to urban migration andthe fact many new arrivals to the city work in the informal sector,there is a risk that informal settlements may grow rapidly. Byaddressing the issue of informality in the housing sector head-on,Vietnam would be able to avoid the expansion of slums,” she added.
Responding as to why the housing sector in Vietnam is currentlyembroiled in challenges, Kwakwa said there is an oversupply of high-endunits and undersupply of lower cost units in urban areas.
“Thismismatch suggests market failures in the housing sector. It is importantto understand the causes of these market failures,” she added.
Incountries where there is ample relatively affordable housing acrossincome strata, the role of governments she said must be to ensure alevel playing field for market participants with specific assistanceprovided to the poorest households.
“When governments focus onthe enabling environment, resources from the private sector can bebetter leveraged to create a sound and sustainable housing sector,” shesaid.
Abhas Jha, sector manager of Urban, Disaster RiskManagement and Transport, East Asia Pacific under the WB said that toavoid slumps, the government can proactively enable affordable housingwithout direct provisions by improving the land market and increasingaccessibility and mitigating risk.
“Planning must be part of the integrated, long-term, risk sensitive land use and transportation planning,” Jha said.
Moreover,affordability should be considered including a range of interrelatedexpenditures, not just the cost of a housing unit, he added.
ConstructionMinister Trinh Dinh Dung said Vietnamese people have a high demand foraccommodation but house prices are much higher than average income.
“Therefore,making houses affordable requires support from the government and eveninternational organisations,” Dung added, noting that housing isdetermined as a priority in socio-economic development policy until 2020with a view to 2030.
As such, a series of legal documents havebeen issued to support the development of the social housing market,notably the low interest 30 trillion VND (1.41 billion USD) loan packageaimed at homebuyers and property developers.
The thing Vietnammust do first and immediately is increase the supply of affordablehousing to disburse the above package from the government and thereforeprovide more and more affordable housing.
The second thing thatmust be done, Dung said, is continue reviewing the law related to thisissue to transfer the package to the right receivers as soon aspossible.
Vietnam has the goal of building 10 million squaremetres of social housing, mainly apartment buildings, by 2015 to meetlow-income earners’ demands. It will provide support for 400,000 poorfamilies in rural areas in need of houses.-VNA
According to Victoria Kwakwa, World Bank countrydirector in Vietnam, the country is undergoing a process of rapidurbanisation with nearly a million people moving to cities per yearputting an immense pressure on housing demands.
“This growth isexpected to generate enormous new housing demands, especially in the lowand middle income segments due to large scale rural-urban migration,”Kwakwa was quoted as saying at a seminar held in Hanoi last week toshare experiences with Vietnam about the development of affordablehousing.
Kwakwa said Vietnamese authorities should better defineand understand the housing deficit for poor urban households – thebottom 40 percent or those below the median income.
“In thiscontext we believe it is important to also consider the housingconditions of migrants, not only those of officially registeredresidents. It will also be important to think of ways of formalisingthose living in informal settlements. Vietnam is fortunate to not havethe large slums seen in other large cities such as Manila or Jakarta,”she continued.
“Given the rate of rural to urban migration andthe fact many new arrivals to the city work in the informal sector,there is a risk that informal settlements may grow rapidly. Byaddressing the issue of informality in the housing sector head-on,Vietnam would be able to avoid the expansion of slums,” she added.
Responding as to why the housing sector in Vietnam is currentlyembroiled in challenges, Kwakwa said there is an oversupply of high-endunits and undersupply of lower cost units in urban areas.
“Thismismatch suggests market failures in the housing sector. It is importantto understand the causes of these market failures,” she added.
Incountries where there is ample relatively affordable housing acrossincome strata, the role of governments she said must be to ensure alevel playing field for market participants with specific assistanceprovided to the poorest households.
“When governments focus onthe enabling environment, resources from the private sector can bebetter leveraged to create a sound and sustainable housing sector,” shesaid.
Abhas Jha, sector manager of Urban, Disaster RiskManagement and Transport, East Asia Pacific under the WB said that toavoid slumps, the government can proactively enable affordable housingwithout direct provisions by improving the land market and increasingaccessibility and mitigating risk.
“Planning must be part of the integrated, long-term, risk sensitive land use and transportation planning,” Jha said.
Moreover,affordability should be considered including a range of interrelatedexpenditures, not just the cost of a housing unit, he added.
ConstructionMinister Trinh Dinh Dung said Vietnamese people have a high demand foraccommodation but house prices are much higher than average income.
“Therefore,making houses affordable requires support from the government and eveninternational organisations,” Dung added, noting that housing isdetermined as a priority in socio-economic development policy until 2020with a view to 2030.
As such, a series of legal documents havebeen issued to support the development of the social housing market,notably the low interest 30 trillion VND (1.41 billion USD) loan packageaimed at homebuyers and property developers.
The thing Vietnammust do first and immediately is increase the supply of affordablehousing to disburse the above package from the government and thereforeprovide more and more affordable housing.
The second thing thatmust be done, Dung said, is continue reviewing the law related to thisissue to transfer the package to the right receivers as soon aspossible.
Vietnam has the goal of building 10 million squaremetres of social housing, mainly apartment buildings, by 2015 to meetlow-income earners’ demands. It will provide support for 400,000 poorfamilies in rural areas in need of houses.-VNA
