Tue. Nov 29th, 2022

State owned commercial banks will offer at least three percent of their
outstanding loans to people who are eligible to buy of rent social
housing.

This is part of new regulations on loans for
social housing with low interest rates and flexible maturity compiled
by the State Bank of Vietnam (SBV) and the Ministry of Construction in
a join effort to tackle the frozen domestic real estate market.

Speaking at a meeting with the National Assembly Standing Committee
late last month, SBV Deputy Governor Dang Thanh Binh said the
regulations are expected to be completed and issued in the first
quarter of this year.

Binh said they would help low
income earners and State employees access credit to buy or rent social
housing or commercial houses with areas of less than 70 square metres
at a cost of less than 15 million VND (720 USD) per sq.m.

Social housing investors and enterprises who switched commercial
housing projects to social housing apartments would also gain access to
loans with interest rates and maturities suitable to their financial
situations, Binh said.

The SBV would offer commercial
banks 20-40 billion VND (960,000 – 1.9 million USD) each year as a
support for social housing lending, Binh said.

‘The
State Bank will inject more long-term capital into real estate to shake
up the market,” he said, adding that it is necessary to have a
mechanism to shift from short-term funding to middle- or long-term.

Binh explained that the bank is planning to set up a national housing
re-mortgage agency to diversify sources providing long-term funds for
the market.

Construction Minister Trinh Dinh Dung said
that this year would see more interest in social housing projects which
would gradually help to meet demand.

“It is difficult
to implement social housing projects because the profits are relatively
low and most enterprises aren’t interested,” he said, adding that more
policies are needed to encourage enterprises to get involved.

The ministry plans to offer social housing enterprises and low income
earners more incentives with regards to social housing. For example,
those eligible will be exempt from land-use fees, reduced value added
tax and offered low interest loans to buy houses, he said.

According to SBV statistics, up to last November, outstanding loans for
real estate investment and trade were over 215 trillion VND (10.3
billion USD), of which bas debt accounted for 5.55 percent.

Nearly 300 real estate companies had loans of at least 100 billion VND
(4.8 million USD) and their total debts to credit institutions were 125
trillion VND (6 billion USD).-VNA

By vivian