Affordable home buyers to get loans with lower rates

The Ministry of Construction will cooperate with the State Bank of Vietnam to implement the VND120 trillion credit package to promote social housing development. (Photo: VNA)

Hanoi - Affordable home buyers can access preferential loans at rates 1.5-2 percentage points lower than the market average as part of a credit package worth around 120 trillion VND (5.02 billion USD).

The State Bank of Vietnam (SBV) raised the fund to promote social housing development through lending to buyers and developers.

At a national online conference held in February aiming to promote the development of the real estate market, the SBV Governor said that the central bank discussed with four State-owned commercial banks, namely Vietcombank, Vietinbank, BIDV and Agribank, ways to implement the package.

The Ministry of Construction (MoC) said affordable home buyers and developers would be provided with preferential loans disbursed from the package. Priority would be given to homes for low-income earners and workers.

Senior expert of BIDV Can Van Luc said that the credit package would boost the real estate market. The value of the package would be higher if other commercial banks joined in, he said.

Ngo Tri Long, former director of the Ministry of Finance's Market Price Research Institute, said that this was a good idea as the market was in a supply crunch of homes for low-income earners and workers.

The Ministry of Construction has proposed the Government arrange a credit package worth around 110 trillion VND (4.6 billion USD) in the form of financing for commercial banks to refinance social housing projects and housing projects for workers. The 110 million VND package was similar to the 30 trillion VND package implemented in the 2013-16 period.

Regarding the ministry’s proposal, the central bank said it was necessary to have a package to boost social housing development to tackle the supply and demand imbalance. However, more consideration must be given to the capital source.

The MoC later retracted the 110 trillion VND package proposal, opting for the implementation of the 120 trillion VND package by the State Bank of Vietnam.

According to Luc, the 120 trillion VND package is a programme with banks' commitments to provide loans with interest rates 1.5-2 percentage points lower than the market rate. Accordingly, the lending rate of this package will be around 10 per cent.

With Southern Industrial Belt, Ho Chi Minh City "thirsts" for social housing As the economic leader of the whole country, Ho Chi Minh City is in the Southern Key Economic Zone (KEZ), contributing to the future "Diamond Octagon” of Vietnam. Therefore, attracting young and professional manpower is one of the city's top priorities to sustain socioeconomic development.

Vietnam home to 513 social housing projects for workers Vietnam has 513 social housing projects for workers, 249 of which with 5.2 million sq.m of floor area are completed, or 41.7 percent of the plan, according to figures from the Ministry of Construction.

The need for social housing in industrial zones is vital In the context of the pandemic, manufacturing activities in industrial zones (IZs) became nearly impossible in some southern areas, which led to the disruption of the supply chain and a shortage of labour. One reason for this situation is that localities were not interested in developing social housing for workers.

MoC reduces its pledge to build over one million social housing units The Ministry of Construction's (MoC) initiative to invest in the construction of affordable homes and apartments for low-income individuals and industrial park staff between 2021 and 2030 has now been amended.