The housing supply in the domestic market is expected to increase in the future thanks to a credit package of VNĐ120 trillion for social housing development and a project on developing one million social houses, as well as other solutions removing existing obstacles.

 

This credit package is carried out by four State-owned commercial banks, Vietcombank, Agribank, BIDV and VietinBank, with annual interest rates from 8.2 to 8.7 per cent. This programme has been implemented since April 1, 2023.

 

This is also one of the important factors in promoting the development of social housing, meeting most people's needs.

 

Regarding this credit package, the State Bank of Việt Nam issued Document No 2308/NHNN-TD on April 1, 2023, guiding the lending interest rates, the application period of the preferential interest rates and the beneficiaries (customers).

 

Meanwhile, the Ministry of Construction issued Official Dispatch No 1551/BXD-QLN on April 20, 2023, guiding the determination of the list of projects, subjects, conditions and criteria for preferential loans for developing social housing and worker housing and renovating and rebuilding old apartments.

 

"Regarding the list of projects getting the loans, the ministry has proposed the Government authorise the provincial people's committees to announce eligible projects. Then, the banks disburse capital based on the demand of those projects. The goal is to shorten the process and procedures in disbursing the capital," Deputy Minister of Construction Nguyễn VănSinh said.

 

Phùng Thị Bình, deputy general director of the Bank for Agriculture and Rural Development of Việt Nam (Agribank), said that the bank has so far provided loans under this credit package for two projects.

 

Lê Ngọc Lâm, general director of the Bank for Investment and Development of Vietnam (BIDV), said that BIDV is waiting for the Ministry of Construction to announce the list of eligible projects.

 

"The banks are very eager to lend, but the projects still have many obstacles," Lâm said.

 

Nguyễn Quốc Hùng, general secretary of the Việt Nam Banking Association, said the banking industry has many solutions to implementing the credit package. Still, there are obstacles in ministries, sectors and localities.

 

The banks have agreed to reduce interest rates. Therefore, it is necessary to have solutions from ministries, sectors and localities to speed up the progress of lending, said Hùng.

 

Finance expert Nguyễn Trí Hiếu said this support package is a short-term solution that the Government and the banks can immediately implement to support the property market.

 

This credit package will be absorbed quickly because of its small scale and being launched when the real estate market is very thirsty for capital. Loan procedures will be done in two weeks for eligible projects and customers. The loans can be disbursed in one month after the courses are approved.

 

The market's absorption capacity depends on the conditions of providing loans under the package and the efficiency in implementing this package, he said.

 

 

Primarily, it is necessary to have a monitoring mechanism so that capital flows to suitable projects and the right businesses to pay for the debt. That will avoid the situation that people who are not low-income or already have a house but still enjoy the support, Hiếu said.

 

Besides that, many people need the loans from this package, but they cannot prove their income to qualify for loans if they do not have a bank account transaction, even though they have income and the ability to pay, he said.

 

Lê Hoàng Châu, chairman of HCM City Real Estate Association, has also added that it is necessary to consider the investment in social housing development for low-income workers as the priority in the investment of local medium and long-term capital.

 

In addition, it is necessary to supplement regulations on capital sources for housing development, such as mobilising capital from local development investment funds and foreign investment for social housing development.

 

Châu has suggested that the Government should continue to study and submit to the National Assembly for approval on a credit package worth around VNĐ110 trillion ($4.6 billion) in the form of financing for commercial banks to refinance social housing projects and housing projects for workers with a preferential interest rate of about 4.8-5 per cent each year for a maximum period of 25 years. The VNĐ110 million package is similar to the VNĐ30 trillion package in 2013-16.

 

Nguyễn Quốc Khánh, chairman of DTJ Investment and Distribution Joint Stock Company, said that capital is a necessary factor at this time, but it is still not enough. Besides capital, the investors of social housing projects always want the project investment procedures and disbursement procedures to be resolved quickly.

 

To effectively disburse this credit package, overcoming the bottlenecks in current social housing development is still necessary. Specifically, it is to establish a land fund for social housing development as soon as possible and reduce procedures in receiving approval for the projects and trading social housing products, Khánh said.

 

The Government has approved a project to build one million social housing units from now to 2030. So now, localities have more than 300 social housing projects with about 400,000 apartments.

 

Việt Nam expects to have a total of 1,062,200 social housing apartments by 2030, including about 428,000 apartments in the period of 2021-2025 and about 634,200 apartments in the period of 2025-2030.

 

This project targets to develop social housing, housing for workers with affordable prices for middle- and low-income households in urban areas and workers in industrial parks and export processing zones.

 

Deputy Minister of Construction Nguyễn Văn Sinh affirmed that besides the VNĐ120 trillion credit package, the Government had introduced a series of solutions to amend the institution, create a land fund, and support taxes and land use fees for communal housing projects.

 

Those solutions are efficient according to the market demand at present; the problem is how to implement those by stakeholders efficiently, Sinh said.

 

He believes that in the future, besides many existing projects that will overcome the difficulties, the project of one million social housing units will make the housing supply on the market more abundant, contributing to bringing house prices back to a more suitable level with people's income.VNS