Sekisui Heim Workforce objectives low cost housing funding in Vietnam

Japan’s Sekisui Heim Group is looking to implement affordable and social housing projects in Vietnam, says Ryuji Saimon, a representative of the group’s subsidiary, Thai SCG Heim.

Saimon expressed the group’s interest at a Wednesday meeting organized by the Ho Chi Minh City Real Estate Association (HoREA), bringing together several Japanese companies including the Japan Housing Finance (JHF) and Thai SCG-Heim, a member of Sekisui Heim as well as large real estate firms in Vietnam.

He said the firm was genuinely keen on building affordable houses in cooperation with local partners.

Saimon noted his company was building prefabricated houses in Thailand, using modern technology. He added they could export 80% prefabricated houses to Vietnam with the remaining 20% completed on site.

Le Hoang Chau, chairman of the HoREA, said this model was suitable for rural areas and matched the government’s plan to demolish some temporary houses and repair others.

He said circumstances were favorable at present for foreign investors participating in the low-cost housing segment. They would receive corporate income tax and VAT reductions of up to 50%. HoREA has asked for a reduction of up to 70% for social housing projects.

Other incentives include the availability of 10-15 year loans at 4.8% interest for investors and 20 years for buyers.

Chau noted that Vietnam was making efforts to have private entities including corporations participate in developing social and affordable housing. Authorities were currently directing the removal of difficulties and obstacles for 60 projects, he said.

Vietnam has a plan to develop 1 million social housing units by 2030, and another to eliminate temporary houses and repair existing ones. The total number of units under the second plan is estimated at 400,000, according to Chau.

Preliminary surveys have shown that HCMC needs 200,000 social housing units and that 60% of immigrants, workers and laborers want long-term accommodation leases. In the 2016-2020 five-year period, HCMC achieved just 70% of the plan.

Currently, HCMC is implementing eight social housing projects with nearly 6,400 units. Chau noted this was an urgent need as many immigrant workers and laborers had to live in boarding houses. The city currently has more than 61,000 boarding houses, with 560,000 rooms that house about 1.4 million people.

In 2020, HCMC saw nearly 17,000 affordable houses come into the market, but in the last few years, the supply has mainly been of high-end housing.