A social housing project in Bac Giang province. (Photo: VNA) According to a survey from the Vietnam Real Estate Association(VNREA), investors and buyers of social housing projects must take loans withhigh interest rates. Specifically, the interest rate is 8.7% per year forinvestors and 8.2% for home buyers. These interest rates have made it difficultfor investors and buyers.
Le Hoang Chau, Chairman of the HCM City Real Estate Association(HoREA), expressed that the credit package of 120 trillion VND does not meetthe criteria of a preferential credit package for social housing. Apreferential credit package for social housing projects must meet two importantcriteria: low interest rate and long-term.
According to Chau, commercial banks' average interest rate at 8.2%per year for buyers is still too high compared to the financial ability oflow-income people.
Nguyen Chi Thanh, Deputy Chairman of the Vietnam Real EstateBrokers Association, agreed that the interest rates for eligible buyers ofsocial housing projects are still high. At the same time, the income of buyersof social housing is currently much lower than real estate prices.
Therefore, it is necessary to lower the interest rates forhomebuyers, Thanh added.
According to many studies, the income of workers is often verylow. About 75% of them have to borrow money to pay for their living costs, theVietnam General Confederation of Labour reported. With the loan interest rateat 8.2% a year, they cannot buy social housing.
For someone with a stable income of 12 million VND a month, theymust take up to 37 years to pay off the loan at high interest rate.
However, if they can borrow at a lower interest rate of only 4.5%a year, the payment period will be shortened to about 19 years, he said.
With the goal of reducing financial pressure on investors andbuyers, VNREA has proposed the interest rate at 6% a year for social housingdevelopers and 4.5% for homebuyers, lower than 8.7% and 8.2% at present.
Along with that, VNREA recommends that the State should haveattractive policies for investors, such as land plots, investor selection, landallocation. Time to deal with investment procedures should be cut from 24-36months to 12 months.
For real estate businesses, VNREA suggests that they restructureproducts and choose housing segments in line with income of buyers and marketdemand. They also need to improve corporate governance ability; andre-determine the selling price.
At the same time, they should strictly comply with commitmentswith investors.
According to the Ministry of Construction, up to now, about 108social housing projects are under the process of investment and construction.
The ministry has announced a list of 24 eligible projects toparticipate in the 120 trillion VND credit package based on the reports from 11provinces and centrally-run cities. The total investment capital for theseprojects is 31.67 trillion VND. The projects have the loan demand at 12.44trillion VND.
In the first seven months of this year, 10 projects of social housingand housing for industrial park workers started construction with 19,853units./.
VNA
