Additional 3,000 billion VND for social housing projects

A recent report from the Ministry of Construction shows that, up to now, the development of social housing has only reached about 30% of the target set in the national housing development plan until 2020 and vision to 2030. Reports from localities show that there are 206 social housing projects with a construction scale of about 168,700 apartments, with a total area of ​​over 8.4 million m2.²is behind schedule or construction is suspended.

According to the Ministry of Construction, in urban areas with a large number of young workers and immigrants such as Ho Chi Minh City, the demand for affordable housing such as social housing is very high, but the supply is lacking or if there is any, it is too far from the center, making travel difficult, so it has not created any attraction.

Ho Chi Minh City alone currently has about 2 million workers living in rented houses, so the demand for buying and renting houses at reasonable prices is very high, mainly young people with limited financial capacity, so products with prices from 350 - 600 million VND/unit always ensure liquidity with the condition of relatively complete infrastructure connecting to the surrounding area. Although the demand is high, many investors are currently not very interested in this segment.

There are 206 social housing projects that are behind schedule or have temporarily suspended construction.

The report also shows that the authorities in some localities have not paid attention to the development of social housing. Investors have not been proactive in investing in the construction of small-sized, low-cost housing. The structure of housing supply is unbalanced, and poor and low-income households do not have the ability and conditions to improve their housing. In addition, one reason for this delay is that the budget allocated for social housing is blocked.

It is the difficulties in capital sources, specifically preferential credit for investors and home buyers, that have made many people not very interested in the social housing segment.

Regarding capital for social housing investment, the Vietnam Bank for Social Policies spent VND1,262 billion in the 2018-2020 period, meeting only about 13% of the demand. This year alone, the bank plans to spend about VND500 billion but has not yet been disbursed. This capital is only lent to households and individuals in need of housing, project investors are not allowed to borrow. The capital to compensate interest rates for credit institutions to lend for social housing has not yet been arranged. The difficulty in capital sources has greatly affected investor sentiment.

According to a representative of the Department of Housing and Real Estate Market Management (Ministry of Construction), in contrast to the situation before 2013, when many businesses requested to participate in the construction of social housing apartments to enjoy preferential policies from the government as well as to anticipate the large demand from this segment, many projects are now requesting to switch back to commercial housing. Not only in Hanoi, but many social housing projects in Ho Chi Minh City are facing a lack of capital and construction stagnation.

In fact, many enterprises in Ho Chi Minh City have implemented dozens of social housing projects, but when the VND30,000 billion credit support package was stopped, they had to delay the construction progress. Some projects have even been delayed in handing over apartments for a long time compared to the commitment because the enterprises lacked money for construction.

Allocating budget capital for social housing credit is an urgent issue to remove obstacles in developing housing for policy and social security beneficiaries. Therefore, to solve the lack of capital to implement social housing projects, the Ministry of Construction has just proposed to the Prime Minister to add an additional VND 3,000 billion to implement social housing projects until 2020 to speed up the progress of 206 projects lacking capital. In addition, providing credit institutions with VND 3,431 billion to compensate for loan interest in 2018.

The Ministry of Construction also said that to ensure the goal of social housing development in the period of 2016 - 2020, by 2020, it will strive to invest in the construction of at least about 12.5 million m²Social housing floor for low-income earners and workers in industrial parks.