According to a survey from the Vietnam Real Estate Association (VNREA), investors and buyers of social housing projects must take loans with high interest rates. Specifically, the interest rate is 8.7% per year for investors and 8.2% for home buyers. These interest rates have made it difficult for investors and buyers.
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A social housing project in Bac Giang province |
Le Hoang Chau, Chairman of the HCM City Real Estate Association (HoREA), expressed that the credit package of 120 trillion VND does not meet the criteria of a preferential credit package for social housing. A preferential credit package for social housing projects must meet two important criteria: 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 of low-income people.
Nguyen Chi Thanh, Deputy Chairman of the Vietnam Real Estate Brokers Association, agreed that the interest rates for eligible buyers of social housing projects are still high. At the same time, the income of buyers of social housing is currently much lower than real estate prices.
Therefore, it is necessary to lower the interest rates for homebuyers, Thanh added.
According to many studies, the income of workers is often very low. About 75% of them have to borrow money to pay for their living costs, the Vietnam General Confederation of Labor reported. With the loan interest rate at 8.2% a year, they cannot buy social housing.
For someone with a stable income of 12 million VND a month, they must 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 and buyers, VNREA has proposed the interest rate at 6% a year for social housing developers and 4.5% for homebuyers, lower than 8.7% and 8.2% at present.
Along with that, VNREA recommends that the State should have attractive policies for investors, such as land plots, investor selection, land allocation. Time to deal with investment procedures should be cut from 24-36 months to 12 months.
For real estate businesses, VNREA suggests that they restructure products and choose housing segments in line with income of buyers and market demand. They also need to improve corporate governance ability; and re-determine the selling price.
At the same time, they should strictly comply with commitments with investors.
According to the Ministry of Construction, up to now, about 108 social housing projects are under the process of investment and construction.
The ministry has announced a list of 24 eligible projects to participate in the 120 trillion VND credit package based on the reports from 11 provinces and centrally-run cities. The total investment capital for these projects is 31.67 trillion VND. The projects have the loan demand at 12.44 trillion VND.
In the first seven months of this year, 10 projects of social housing and housing for industrial park workers started construction with 19,853 units.
Source: VNA