Thang Long Green City social housing project in Hanoi's Dong Anh District. (Photo: VNA) The package covers social housing development, homes for workers,and renovation of degraded apartments with preferential interest rates around1.5-2% lower than the average of four State commercial banks.
According to experts, the Government should remove difficultiesfor many real estate businesses, not just social housing businesses. When boththe affordable commercial and social housing segments meet actual needs, itwould create a push, helping change the entire system and solving the gloomysituation of the real estate market.
Recently, many policies to remove difficulties for the real estatemarket have been directed by the Government to create positive changes in theindustry. The Government issued Resolution No 33/NQ-CP on a number of solutionsto remove difficulties and promote the safe, healthy, and sustainabledevelopment of the real estate market. This is one of the efforts expected bymany people and businesses.
In addition, the Government also signed Decision 388/QD-TTg toapprove a project of developing at least 1 million affordable homes forlow-income earners and workers in industrial zones in the 2021-2030 period.
The project targeted that around 428,000 apartment units would becompleted in the 2021-2025 period and another 634,200 in 2025-2030.
Up to now, this credit package of 120 trillion VND has been mainlyfor businesses and buyers of low-cost housing, social housing, and worker housing with an interest rate from 1.5 – 2% lower than theaverage lending interest rate of banks in the market in each period.
However, experts said that, in the context of the limited supplyof social housing, it is advisable to expand the beneficiaries of this loanpackage, such as cheap commercial housing.
Ngo Tri Long, former Director of the Price Market ResearchInstitute under the Ministry of Finance, said the credit package is a goodidea. The level of interest rate support after reducing it will be around 10%.This interest rate may still be difficult for both estate developers and homebuyers related to social housing and worker housing.
From the property investors' side, developing social housing isnot profitable. The input costs are high, but the selling price is controlled,which will affect the profit factor in their business. It is also an issue thatneeds to be considered when banks make policies, Long added.
Currently, estate businesses have been short of capital. It isvaluable to reduce interest rates. The reduction level of 1.5 – 2% willprobably be acceptable to businesses because they also have incentives on landrent and tax policies. However, the interest rate reduction of 1.5 – 2% mightnot be high for home buyers because the poor would still find it difficult toaccess the loan.
Therefore, the package should consider giving priorityto low-cost commercial housing, not just applying it to social housing andworker housing.
At present, low-cost commercial housing is also in great demandbut the supply is relatively scarce, while the low-priced housing buyers arealso close to the threshold of the policy beneficiaries or slightlybetter.
Nguyen Van Dinh, Vice Chairman of the Vietnam Real EstateAssociation, said the market's demand not only focuses on social housing butalso affordable and mid-range commercial housing. The ultimate goal that peopleaim for is just a reasonable house price, not too high compared to theirfinancial ability.
Dinh said in addition to social housing projects, the creditpackage of 120 trillion VND should expand the loan recipients to low-costcommercial housing projects. This not only helps people have access to a morediversified supply, and effectively disbursed credit packages but alsoencourages many investors to participate in the development of mid-range andaffordable commercial housing.
Nguyen Quoc Bao, Chairman of the HCM City Real Estate Club, saidbusinesses that develop commercial housing, but are targeting mid-end andaffordable segments with reasonable prices to match the ability of buyers,should also be encouraged and enjoy the support package.
For example, there are not many commercial housing projects in themid-end and affordable segments, but compared to social housing, thesupply is still many times larger. It is easy to attract estate developers.Therefore, this segment should not be removed from the beneficiaries of thecredit package, especially in the context of the current difficulties.
At the same time, experts and businesses said that the Governmentneeds to quickly complete the legal corridor, mechanisms and policies tosupport businesses to develop affordable housing and social housing. In fact,to get a bank loan, a project must have a construction permit. Meanwhile, ittakes many years for a project to get a construction permit, even up to 4-5years. This situation would discourage many businesses from participating inlow-cost real estate development./.
VNA
