How Vinhomes Social Housing Looks Like & Who Can Own It?
The reason why Vinhomes enters Social Housing?
Vinhomes is not strange to the public. Since 2018, it has continuously built large urban projects in both Hanoi and Ho Chi Minh City, such as:
- Hanoi: Vinhomes Symphony, Vinhomes Green Villas, Vinhomes Smart City, Vinhomes Ocean Park, Vinhomes West Point, Vinhomes Green Bay, Vinhomes Skylake, Vinhomes Metropolis, Vinhomes Gardenia, Vinhomes Thang Long, Vinhomes Nguyen Chi Thanh, Vinhomes Times City, Vinhomes Royal City, Vinhomes Riverside…
- HCMC: Vinhomes Grand Park, Vinhomes Golden River, Vinhomes Central Park
The projects built by Vinhomes meet the quality of works, follow the construction schedule and are often handed over earlier than expected. In addition, Vinhomes always cooperates with major banks to support financial loan packages for buyers, creating good absorption for their products and helping them easily reach final buyers.
It can be seen that most of the projects Vinhomes has been built are in the mid-range to high-end segments, so why does Vinhomes this time decide to step into the field of Social Housing?
If we take a closer look at Vinhomes’ orientation, we will see that they are always consistent with their original ideals:
“More Value Creates More”
On May 11, 2022, at the annual general meeting of shareholders of Vingroup, billionaire Pham Nhat Vuong answered a question about the Vinhomes real estate sector in front of the challenges of land policy that may change in the future:
He said that the more perfect the policy, the easier it will be for genuine and good businesses to follow: “Vinhomes does a genuine, serious business and respects the law. It is an opportunity, not a challenge. We do not divide the land lot for sale, create fake projects but the more we build, the more value we create”.
The owner of Vingroup emphasized that Vinhomes thrives on values ​​and services in the future, not the land. Accordingly, the average cost of land in a house of Vinhomes only accounts for the highest 30% and 70% is other costs.
To build an urban area, there are 5 groups of costs: land money, investment in urban infrastructure construction, investment in service and utility infrastructure, investment in building houses and branding costs.
It is known that people’s housing demand is always increasing, while real estate prices are always escalating, making it increasingly difficult to buy a house, especially for low-income people.
Because of the influence of land prices, the price of Vinhomes was adjusted up. And with the incentives of the developer of the Social Housing project, Vinhomes will have the opportunity to create value for people through this product when the price is considered to be very suitable: from 300 million VND, 400-700 million VND and 950 million VND.
Vinhomes’ goal is to build as much as possible cheap, beautiful houses with enough basic amenities for low-income people. The implementation of social housing projects by Vinhomes does not bring much profit, but its charitable and social significance is great. Vinhomes shareholders will be very proud of that.
Incentives of developers of Social Housing construction projects?
Excerpt from Clause 1, Article 58 of the 2014 Housing Law, incentives for developers in Social Housing construction projects include:
- To be exempted from land use levy and land rent for the land area allocated or leased by the State for investment in construction of social housing;
- To be exempted or reduced from value added tax and corporate income tax in accordance with tax laws; in the case of construction of social houses for rent, the value-added tax and corporate income tax reduction will be higher than in the case of construction of social houses for lease, purchase and sale;
- To receive preferential loans from the Bank for Social Policies or credit institutions operating in Vietnam; in the case of construction of social houses for rent, loans with lower interest rates and longer loan periods than in the case of social housing construction for lease purchase or sale;
- To be supported by the provincial People’s Committee in whole or in part with investment funds for the construction of technical infrastructure systems within the scope of social housing construction projects; in case of construction of social housing for rent, this whole budget shall be supported.
What is Social Housing?
Social Housing means housing with State support for the beneficiaries of housing support policies in accordance with this Law.
Who can buy Social Housing?
Excerpt from Clause 1, Article 49 of 2014 Housing Law, beneficiaries of Social Housing support policies:
- People with meritorious services to the revolution according to the provisions of the law on preferential treatment for people with meritorious services to the revolution;
- Poor and near-poor households in rural areas;
- Households in rural areas are often affected by natural disasters and climate change;
- Low-income people, poor and near-poor households in urban areas;
- Employees are working at enterprises inside and outside the industrial zone;
- Officers, professional non-commissioned officers, professional and technical non-commissioned officers, professional soldiers, workers in agencies and units of the People’s Police and the People’s Army;
- Cadres, civil servants and public employees in accordance with the law on cadres, civil servants and public employees;
- Subjects who have returned their official residences as prescribed in Clause 5, Article 81 of this Law;
- Students, students of academies, universities, colleges and vocational schools; Students at a public boarding school for ethnic minorities may use housing during their study period;
- Households and individuals subject to land recovery and having to have their houses cleared or demolished in accordance with law but have not yet been compensated by the State with houses or residential land.
What will Vinhomes Social Housing look like? What amenities are there?
Chairman of the Board of Directors of Vinhomes Pham Thieu Hoa has just shared details of the plan to build 500,000 social houses in the next 5 years.
Currently, Vinhomes is planning Social Housing with Happy Home brand, including 3 types:
Type 1 is apartments in buildings with a maximum height of 7 floors, with an area from 24 m2 of floor and 12m2 of loft. These apartments will cost nearly 300 million VND.
Type 2 is apartments in 15-21 storey buildings, with an area of ​​​​30-50 m2, the price is 400-700 million dong.
Type 3 is 3-storey semi-detached houses, with an area of ​​​​50-70 m2, the maximum price is 950 million VND. The number of houses will not be much because priority should be given to land to build high-rise apartments.
“For a good life for everyone”, Vinhomes will bring the “Full Amenities” model that has become a feature of Vinhomes to apply to Social Housing projects. Thus, urban areas will have full basic facilities such as schools, commercial centers, children’s play areas, parks, sports areas…
Each urban area will have a scale of 50-60 hectares or more and will be deployed in the periphery of major provinces and cities such as Hanoi and Ho Chi Minh City, Hai Phong, Quang Ninh, Da Nang… And precisely because of such a suburban location, to ensure the travel needs of people, Vinhomes will deploy VinFast electric bus routes connecting the residential areas with important intersections.
With Happy Home, when building Social Housing, businesses do not have to pay for land. And also because this is a type of Social Housing, the principle must be followed that only the cost of capital recovery, including loan interest and the rated profit of the entire project must not exceed 10% of the total investment cost.
So when will the first Vinhomes Social Housing project be handed over?
Vinhomes has applied to build a number of Social Housing projects in the districts of Hanoi and Ho Chi Minh City; At the same time, it is also preparing to build social housing land in its existing projects.
In terms of time, the first project is expected to start construction in August this year. The first buildings will be put into use from June 2023.
How does Vinhomes ensure 500,000 Social Housing homes reach the right hands of low-income people?
Half a million Social Housing is a very large number and Vinhomes insists 100% of the houses will reach the right people.
Vinhomes will organize direct and public sales. All registration documents will be assessed before being submitted to the Department of Construction for permission, so Vinhomes believes that these houses will come to the right address.
If you are a low-income person, do you support this great ideal of creating value for society of Vinhomes?
And if you are a real estate investor, do you support this ideal of building sustainable value of Vinhomes?
Share your views by replying to this topic!
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