New loan packages for social housing

A view of Dang Xa social housing project in Ha Noi’s Gia Lam District. - Photo bizlive.vn

Nguyen Tran Nam, chairman of Viet Nam Real Estate Association (VNREA) told the association’s meeting held earlier this week that the Law on Housing 2014 and Decree No 100/2015/ND-CP on social housing and cheap housing stipulates that capital for the two packages would come from commercial banks and the Viet Nam Bank for Social Policies.

Commercial joint stock banks with controlling State stake-holdings would have to spend 3 per cent of their total outstanding loans for developers and buyers of social housing projects.

The second source for loans for social housing projects would come from the Viet Nam Bank for Social Policies. The bank would use 50 per cent capital from the State budget and the moblise the remaining capital to provide loans for people to buy social housing with a maximum interest rate of 5 per cent.

However, the policies have not taken effect yet as it was infeasible for commercial banks to set up a fund for loans for social housing projects. Most commercial banks have faced difficulties in providing preferential loans to social housing projects.

Secondly, the Viet Nam Bank for Social Policies has not only focused on loans offered to low-income earners but other programmes such as agriculture, maritime economic development and supporting students.

VNREA in June sent a document to the Prime Minister, State Bank of Viet Nam and the minister of Construction to ask for specific laws enforced to provide capital for social housing.

The chairman affirmed that there would be money inflows in the social housing segment in 2017. VNREA targeted establishing a pilot property investment fund to have independent capital mobilisation for the market without depending on bank loans.

It also proposed mechanisms and policies to encourage the development of social housing and cheap commercial housing segments with areas of less than 75sq.m and selling prices of less than VND15million per sq.m.

The association suggested reducing VAT and corporate income tax to facilitate real estate firms to build cheap apartments.

Several real estate firms and specialists said that the Government should have stable solutions to increase the supply of social housing and cheap housing projects.

VNREA said there have seen negative signs in the estate market, especially the unbalanced housing structure. Up to 70 per cent of property products in the market are high-end apartments while most people need low and medium houses.

It has been hard to create apartments with selling prices of less than VND20 million per sq.m in Ha Noi and HCM City. Since the end of VND30 trillion stimulus package, estate firms have not attention to social and cheap commercial housing.

Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company said thhat Government support in taxes, capital and administrative procedures were necessary for the development of social housing programmes.