Injecting 30 trillion VND into real estate.
On May 15th, the State Bank of Vietnam and the Ministry of Construction signed a circular stipulating that from June 1st, people can borrow capital at an interest rate of 6% per year for 10 years to buy houses. Businesses can also borrow to develop social housing.
From June 1st, buyers of social housing and affordable commercial housing will be able to borrow at an interest rate of 6% per year. (In the photo: Residents of An Suong apartment complex, Dong Hung Thuan Ward, District 12, Ho Chi Minh City)
From June 1st, the 30 trillion VND support package for the real estate market will take effect, allowing people to borrow at preferential interest rates for 10 years to buy or lease social housing and affordable commercial housing.
This is one of the provisions in the circular guiding home loan lending, which was signed by the State Bank of Vietnam and the Ministry of Construction on May 15th. Accordingly, the support package also allocates up to 30% of the capital to support businesses that are investors in social housing projects and commercial housing projects that have been converted to social housing.
21 trillion VND in interest rate subsidies for homebuyers.
Speaking to the press at the signing ceremony of the circular, Mr. Nguyen Viet Manh, Director of the Credit Department of the State Bank of Vietnam, said that individuals can borrow capital at an interest rate of 6% for 10 years to buy, rent, or lease-purchase social housing or commercial housing with an area of less than 70m2/unit and a selling price of less than 15 million VND/m2. Accordingly, all contracts that buyers have signed with investors from January 7, 2013, will be eligible for loans at an interest rate of 6%/year. For businesses, the maximum loan term is five years.
“Of the 30 trillion VND, the State Bank of Vietnam has allocated 70% for loans to individuals and 30% to businesses. However, this credit package is not intended to rescue the real estate market, but rather to support low- and middle-income individuals with genuine housing needs. This policy has social significance and is of a welfare nature,” Mr. Mạnh said.
Deputy Minister of Construction Nguyen Tran Nam also commented that the 30,000 billion VND credit is a significant amount. This capital accounts for 15% of the total outstanding loans to the real estate market, which is approximately 200,000 billion VND. Furthermore, compared to the overall credit growth rate of 2012, which was very low, and especially in the first four months of 2013, where credit growth only reached 1.44%, the aforementioned 15% is quite substantial.
"If this capital is properly and effectively disbursed by banks, it will be a boost for the real estate market, particularly for social housing and small-scale, affordable commercial housing. Hopefully, this will then spread to other segments, helping the real estate market gradually recover. Of course, compared to the needs and desires of the people and businesses, this 30,000 billion VND is still insufficient," Mr. Nam said.
According to Tuoi Tre - TH
