Hanoi (VNS/VNA) - The Ministry ofConstruction (MoC) is completing a draft resolution to encourage thedevelopment of low-cost commercial apartments to submit to the Government inthe third quarter of this year.

The move aims to help the real estate market recover in the“new normal” context, said Deputy Minister of Construction Nguyen Van Sinh.

The low-cost commercial apartments would have self-containeddesigns with an area of less than 70sq.m and selling price of under 20 million VND per spq.m, The maximum valueof an apartment must not exceed 1.5 billion VND (including VAT).

The resolution would provide many preferential policies onland use fees, taxes, construction investment procedures and capitalmobilisation mechanisms to create favourable conditions for developers toinvest in such projects. Homebuyers would have more opportunities to buycommercial housing at reasonable prices, helping address people's housing needs.

The Government has instructed to arrange an additional 1trillion VND forthe VietnamBank for Social Policies and adding an additional 2 trillion VND to subsidise interest ratesfor four commercial banks designated by the State Bank of Vietnam. The countryhas mobilised more 60 trillion VND tosupport estate developers to build social housing projects and lend to peoplein buying and renting such apartments.

The Government has amended and supplemented Decree No100/2015/ND-CP onsocial housing development with favourable conditions by reserving 20 percentof the total land fund for the projects. It also directed focusing on amendingand supplementing Decree 101/ND-CP onrenovating and rebuilding old apartment buildings in big cities to ensure safeaccommodation.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry(VCCI), saidproperty had been an important sector to create jobs.

However, the COVID-19 pandemic has caused instabilities forthe estate market in the first half of the year. Many real estate projects hadto halt construction, foreign direct investment (FDI) inflows into the propertysector sharply fell and the number of newly-established firms in the sector inthe first six months of the year declined by 12 percent from the same periodlast year. Many estate firms had to suspend operations and inventory in theproperty market has been on the rise.

In addition, Loc said the overlap of the legal system ininvestment, construction and land management had been a major obstacle toincrease real estate supply while demand for social housing was still high. Torevive the market, it was necessary to promptly implement existing supportpackages, especially the medium and long-term credit support packages forimportant real estate projects. At the same time, it was necessary to promotereforms of mechanisms and policies on construction investment and real estatebusiness in a more open and convenient manner.

Currently, the demand for low-cost housing projects has beenhigh, especially in Hanoi and HCM City./.