As early as next year, middle-class residents in the southern hub will be getting “Japan quality” housing.
While city officials work to tackle low-income housing in Saigon, the Japanese government and a handful of private Japanese firms are joining together to bring “Japanese quality” homes to Vietnam, reports Nikkei Asian Review.
Along with the privately owned Maeda Corporation, Kyoei Steel Ltd. And Tokio Marine Holdings, Inc., the Japan International Cooperation Agency (JICA) aims to create a financial scheme in which middle-income home buyers may take out loans to purchase high-quality, affordable housing.
The local government will also assist with the US$192 million project, which marks the first time Japan has used this type of overseas development assistance to help Southeast Asian residents acquire housing.
Roughly half of the project's budget will come from JICA by way of low-interest official yen loans. This money will then be used to create long-term housing loans and credit guarantee schemes. As a result, Vietnamese financial institutions will be able to extend 15- to 20-year loans with fixed interest rates to home buyers.
If all goes according to plan, funding for these Japanese-quality homes could begin as early as 2017. Officials expect to provide over 50,000 housing loans each year. Should the Saigon program prove successful, Japan may also expand the scheme to Hanoi and Da Nang.
For their part, Maeda, Kyoei Steel and Tokio Marine Holdings all stand to benefit from the project as well. These high-quality houses will be built using the precast concrete construction method used in Japanese high-rise buildings. Maeda will win housing contracts from the scheme, Kyoei Steel will expand its sales of construction materials and Tokio Marine Holdings will be able to sell fire insurance policies to new homeowners.
