Business Today: The Importance of Profitability in Real Estate Development

In a recent conference on social housing development, Prime Minister Pham Minh Chinh emphasized the significance of profitability in real estate ventures. While it is imperative for businesses to generate profits from their housing projects, the key lies in striking the right balance. Selling homes at exorbitant prices would render them unaffordable for the general public, while offering them at extremely low prices would leave the businesses unsatisfied.

Social Housing: A Pillar of Social Welfare and Economic Development

Prime Minister Pham Minh Chinh highlighted the crucial role of social housing in both social welfare and economic development. Providing housing for the workforce is not only a cornerstone of social welfare policies but also an effective solution to drive economic and social progress.

The Prime Minister emphasized that our Party and State have built and developed the country based on three pillars: constructing a democratic socialist society, establishing a socialist rule of law state, and developing a market-oriented economy with socialist orientation. The guiding principle is centered on the individual as the core, the subject, the objective, the motive, and the source of development. In doing so, we must not sacrifice progress, fairness, social welfare, and the environment for the sake of mere growth.

According to the Prime Minister, housing is one of the three pillars of social welfare. “Stable housing leads to settled lives,” and citizens have the right to legal and proper housing.

Continuing Efforts to Improve Housing Conditions Nationwide

Almost a year ago, on April 3, 2023, the Prime Minister issued Decision No. 388/QD-TTg approving the project “Investment in the construction of at least 1 million social housing units for low-income individuals and workers in industrial zones during the period 2021-2030.” The State Bank of Vietnam has proposed and implemented a preferential credit package worth 120 trillion VND to support social housing development. Furthermore, the Prime Minister plans to launch a nationwide campaign to demolish temporary and dilapidated houses.

The Prime Minister emphasized that social housing development is in line with the Party’s policies and the cultural and historical traditions of our nation, which advocate for collective support and cooperation.

Image: Prime Minister Pham Minh Chinh addressing the conference.

Incentives for Social Housing Projects

The Prime Minister outlined various incentives for social housing projects, including:

• Allocating up to 20% of the total land area for constructing public works, services, and commercial housing.
• Exempting land use fees and land lease fees for the entire land area of the project.
• Removing the requirement for developers to determine land prices.
• Providing preferential interest rates for loans.
• Relaxing residency requirements for homebuyers and social housing tenants.
• Offering additional benefits for workers and armed forces personnel regarding accommodation in industrial zones and military housing.

While significant progress has been made in social housing development, there is still work to be done to meet the set targets. The Prime Minister urged the participants to discuss and identify the achievements and shortcomings, as well as the objective and subjective factors affecting the progress. Additionally, he encouraged them to propose recommendations and suggestions to the Government, the Ministry of Construction, and other relevant authorities.

Focus on Resolution to Achieve Goals

During the conference, the Prime Minister posed a fundamental question: “Are our mechanisms and policies correct and effective? If they are, but we are still unable to achieve our goals, what are the subjective and objective reasons, and how can we overcome them? Each entity involved, including the government, the people, and businesses, must fulfill their responsibilities and make every effort in this endeavor. We must put ourselves in the shoes of others and follow the principle of ‘through you, I exist, and through me, you exist,’ resonating with our national tradition of mutual support and cooperation.”

The Prime Minister emphasized the pivotal role of grassroots organizations, being the closest and most connected to the people. He stressed the importance of “harmonious benefits, shared risks, and strength from the people.” The work must be focused and prioritized to achieve tangible results in social housing development.

Taking the perspective of businesses, the Prime Minister stated that profit is essential. However, the challenge lies in determining the appropriate level of profitability. Exorbitant profits would hinder public affordability, while lower profits would not satisfy businesses.

During the conference, the Prime Minister assigned targets to provinces and centrally governed cities, urging them to concentrate on their tasks. He emphasized the need to consider this issue within the framework of available resources and explore whether we can apply the lessons learned from our past national struggles for independence to the current development of social housing.

The Prime Minister once again underscored the significance of grassroots organizations, highlighting their role as the closest and most connected to the people. He reiterated the importance of “harmonious benefits, shared risks,” the principle that resources originate from thoughts, motivation is generated by innovation, and power arises from the people. The key lies in focusing our efforts and decisively addressing the challenges in social housing development.

Business Today