Social housing needed to boost capital in real estate

March 19, 2024 | 10:38

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Amid a gloomy real estate market, experts have pointed out that the affordable housing segment is the key to mobilising capital.

Le Xuan Nghia, an economist, suggests that focusing on developing affordable housing projects instead of social housing or worker housing under stringent conditions would help stimulate real estate capital flow.

Social housing needed to boost capital in real estate

Low-priced housing projects are necessary

"If the attention remains solely on social housing as it is now, it will lead to stagnation because those who can afford houses cannot buy them, while those eligible to buy lack the ability to pay," Nghia said. "The disbursement of the $5 billion package is very slow, plus, the social housing loan package under government Decree No.100/2015/ND-CP is almost a failure."

Having the same outlook on the $5 billion credit package, Phung Thi Binh, deputy general director of Agribank, believes that that package should be applied to those with moderate incomes.

"Agribank has provided loans to developers for the implementation of six affordable apartment projects in Binh Duong, and these projects have shown significant output," said Binh.

The State Bank of Vietnam (SBV) only restricts real estate credit for speculative segments, or projects that inflate prices, making the products difficult to consume, and making it difficult to circulate capital and recover debts.

However, for projects suitable for the average budget, the central bank still encourages them, according to Dao Minh Tu, Deputy Governor of the SBV.

Tu also said that such projects in the market were not numerous, mostly covering two segments: high-end apartments and social housing.

Tight control over real estate credit to mitigate risks

The State Bank of Vietnam (SBV)’s decision to tighten control over real estate credit has helped to restrict speculation while making the market transparent and preventing a real state bubble, economic experts have said.

Central bank not tighten real estate credit: Deputy Governor

The State Bank of Vietnam (SBV) has never issued any documents or statements ordering credit for real estate be tightened, Deputy Governor Dao Minh Tu said on February 8.