Brian Jeffrey
Support for Social Housing Development
Ha Quang Hung, deputy director of the Housing and Real Estate Market Department, stated that the government is prioritizing the growth of social housing initiatives by providing direct assistance to homebuyers and indirect support through real estate agents.
The government aims to construct at least one million social housing units for low-income families and workers in Industrial Zones from 2021 to 2030. Local governments are tasked with managing the development of specific social housing projects.
Recent policy changes have broadened the eligibility criteria for social housing, easing residency and income requirements for potential buyers.
Nguyen Van Dinh, president of the Vietnam Association of Realtors (VAR), noted that many procedural hurdles have been removed to facilitate investment in social housing.
Moreover, commercial banks are also contributing to the initiative by establishing a preferential loan package worth VND120 trillion to support the construction of the intended one million apartments.
For sustained progress, Dinh emphasized the necessity for the government to lead in social housing development, overseeing everything from land allocation to financial organization while real estate companies act mainly as constructors.
Key Factors for Social Housing Purchases
With two decades of experience in social housing, Truong Anh Tuan, the president of Hoang Quan Group, identified three essential factors that enable individuals to purchase social housing: supportive policies, accessible loans, and monthly savings.
Tuan expressed satisfaction with the government’s current support for social housing, highlighting that potential buyers can now access loans with favorable interest rates of 6.6% per year. He also stressed that regular savings are crucial for prospective homeowners.
“To afford a VND1 billion apartment, a person must save around VND5-7 million each month. Achieving this goal makes social housing attainable,” he explained.
He also remarked that the prices of social housing have dropped significantly, now at about 20% of the value of typical commercial real estate.
Expansion of Credit Packages
Tran Hoang Nam from the HCM City University of Economics and Finance highlighted the expansion of the credit package, which now totals VND145 trillion available for disbursement, with participation from nine commercial banks. The current interest rate for this scheme is set at 6.5% until the year’s end, though Nam believes it remains relatively high.
Buyers may also explore loans from different sources, such as the Bank for Social Policies (BSP).
Challenges in Financial Arrangements
Dao Anh Tuan, director of the BSP’s Tay Ninh branch, indicated that securing capital poses the greatest challenge, as the bank’s funds are government-supplied. Following Decree 100/2024, lending rates for social housing projects will increase from 4.8% to 6.6% starting August 1.
Tuan clarified that loans designated for impoverished households must be at a minimum interest rate of 6.6% to maintain equity among borrowers.
Collaboration for Successful Implementation
Can Van Luc, an esteemed economist, affirmed that achieving the goal of one million social housing units by 2030 requires collaboration from four key groups: the government, banks, investors, and buyers.
The government must disclose land bank plans, enhance social infrastructure, and ascertain the regional demand for social housing.
Commercial banks are expected to provide favorable funding, while investors should prepare adequately in terms of capital and process management. Buyers must focus on financial planning through saving and judicious borrowing.
Regarding the BSP loans, Luc reiterated the increased lending rate from 4.8% to 6.6% and suggested that reducing interest for social housing loans hinges on lowering rates for poorer households first.
