According to the Da Nang Statistics Bureau-released report on the city's socio-economic situation in the first quarter of 2023, the Producer Price Index (PPI) of real estate business increased by 6.55% over the same period in 2022.

The social housing apartment project aon the land lot No B4-2 in the Bau Tram Lakeside Green Urban Area, Hoa Hiep Nam Ward, Lien Chieu District is a bright spot of the city's real estate market in early 2023. Photo: H.H

The city’s real estate market is frozen due to increased bad debt, tightened monetary policy and related new policy issues. According to real estate experts, these difficulties and obstacles need to be removed soon to promote the development of the real estate market, hereby contributing to boosting the local socio-economic growth.

Real estate transactions reduce

Data released by the Da Nang Statistics Bureau shows that the production value of the construction industry in the first quarter of 2023 was estimated at VND4,668 billion, down 12.2% against 2022. Of which, the deepest reduction was recorded at housing and non-residential projects.

Difficulties in accessing loans, and the overlap in administrative procedures related to land, construction and business investment, are causing certain problems for investment activities in real estate projects.

Deputy Director of the municipal Department of Construction Tran Van Hoang affirmed that the local real estate market in the city faced many difficulties in the first quarter of 2023 due to the domestic and world economic fluctuations.

Many businesses were forced to suspend operations or operate in moderation. Real estate businesses and organisations had difficulties in accessing credit loans and mobilising customer capital. Also, market liquidity was low so real estate businesses had to delay or suspend projects due to a lack of capital.

Between January and March, there were no newly licensed real estate projects in the city. Investors and retail customers focused mainly on urgent consumption for families and individuals instead of purchasing real estate for living or investment due to the general impact of the global economy.

Along with that, the capital mobilisation interest rate of commercial banks increased, people with idle money tended to put money into the savings channel, so the number of real estate transactions significantly decreased.

During the 3-month period, the number of real estate transactions in the city was only 1,460 apartments and individual houses, equal to 42.4% compared to the same period in 2022.

Mr. Tran Van Hoang also said that the Department of Construction has actively asked the investors of social housing projects to urgently speed up the progress of housing projects in order to put apartments for sale, thereby contributing to solving the housing needs of residents according to regulations.

Also, he also recommended organisations and individuals carefully learn about the legal status of real estate projects, and only conduct transactions in real estate projects that are eligible to be put into business.

A block of houses in the social housing apartment project in the An Trung 2 residential area is under construction. Photo: H.H

Highlights of social and commercial housing projects

In the gloomy general picture of the real estate market in the first 3 months of the year, a social housing apartment project was officially opened for sale with 1,809 apartments in the city.

Developed by the Saigon - Da Nang Investment Joint Stock Company (SDN), the affordable housing building is located on the land lot No B4-2 in the Bau Tram Lakeside Green Urban Area, Hoa Hiep Nam Ward, Lien Chieu District.

Notably, two blocks CT5 and CT10 will feature 21 storeys each, whilst the remaining 4 blocks CT6, CT7, CT8 and CT9 will be 20 storeys each.

These blocks will provide a combined total of 1,809 apartments, including 348 commercial apartments with a usable floor area of ​​about 21,137 m² each, 1,165 social housing apartments for sale with usable floor area of ​​about 67,409 m² each, and 296 social housing apartments for rent with a usable floor area of ​​about 16,889 m². Each of the apartments will cover an area of between 45m² - 93m².

The selling price of each apartment under the social housing category is VND16,061 million/m² of floor space, including 5% value-added tax but excluding 2% maintenance costs. Currently, 1,550 eligible people have registered to buy apartments.

According to the municipal Department of Construction, in the first quarter of this year, only one commercial housing project in the city was opened for sale with 82 units.

Currently, 25 housing development projects with a total of 8,792 units are underway in the city. Of this figure, four new developments, providing 605 apartments in total, are eligible for sale in the first quarter of 2023. In addition, five social housing projects with a total of 4,500 apartments are under construction.

The city has requested the central government and ministries and branches to handle difficulties, and obstacles, as well as create favourable conditions to unleash resources from real estate and housing projects for promoting the city's socio-economic development.

In the context of post-pandemic economic difficulties, commercial banks tightening lending requirements and high lending interest rates, the Da Nang branch of the Viet Nam Bank for Social Policies has been offering a loan programme with preferential interest rates for low-income earners, officials, civil servants, and public employees to buy social housing or build and repair houses.

Director of the Da Nang branch of the Viet Nam Bank for Social Policies Doan Ngoc Chung informed that his bank has disbursed more than VND221 billion to 718 customers in 2022.

“This year, we have access to more abundant capital than in 2022, estimated at about VND 300 billion. We are disbursing according to the plan for those who are in need of social housing apartments" he added.

Reporting by HOANG HIEP - Translating by M.DUNG