Businesses and people are not interested in the 120,000 billion VND loan package?
(Baonghean.vn) - Although the 120,000 billion VND incentive package to implement Resolution 33 of the Government is ready, the limited housing supply, meanwhile, high interest rates, only maintained for 5 years, after which the interest rate must be negotiated with the bank... makes people and businesses worried.
Removing housing difficulties for low-income people
Responding to the Government's target program to build 1 million social housing units for workers in the 2023-2030 period, the Department of Construction is reviewing and evaluating the results of the housing development program in the province, including social housing for workers and low-income people. From now until 2030, Nghe An plans to build about 15,000 social housing units for workers, mainly in industrial parks in Vinh City and neighboring districts.
According to the Department of Construction, the province has so far approved the investment policy to implement 39 housing projects with social housing, including 6 social housing projects and 33 projects with 20% of land fund for social housing. The total land area for social housing construction is 56.8 hectares. It is expected that after completion, it will meet the demand for about 29,017 apartments with 1,880,000m2 floor. Currently, there are 6 completed projects with 10 apartment buildings, 1,381 apartments, 69,054m2floor
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| Social housing area for workers and low-income earners of Trung Do Joint Stock Company in Trung Do ward, Vinh city. Photo: Nguyen Hai |
Of the 6 social housing projects, 5 are dedicated to industrial park workers with a total land area of 34 hectares and a total investment of VND3,493 billion; expected to accommodate 25,892 workers with 8,276 apartments.
There are currently 4 new projects approved and still in effect with a total of 8,200 houses including 4 large companies: MK Central Solar Power Joint Stock Company and BMC International Trading Joint Stock Company in Nghi Long and Nghi Thuan communes (Nghi Loc); 1 project of Kim Thi Real Estate Joint Stock Company in Nghi Xa commune (Nghi Loc) and 1 project of Song Lam Cement Joint Stock Company is completing investment procedures.
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| Many low-income workers still have to rent cramped rooms that do not guarantee their livelihood. Photo: Thu Huyen |
Regarding housing support loans, according to the State Bank of Vietnam, Nghe An Branch, in the recent past, the banking sector in the area has provided housing support loans in accordance with Resolution No. 02/NQ-CP dated January 7, 2013 of the Government on a number of solutions to remove difficulties for production and business, support the market, resolve bad debts and Circular 11/2013/TT-NHNN dated May 15, 2013 of the State Bank of Vietnam regulating housing support loans in accordance with Resolution No. 02/NQ-CP. The cumulative loan turnover from the beginning of the program to date is VND 512 billion at 13 bank branches in the area. The remaining outstanding debt as of February 28, 2023 is VND 146 billion, with 801 customers.
For loans under Decree No. 100/2015/ND-CP dated October 20, 2015 of the Government on development and management of social housing and Circular No. 25/2015/TT-NHNN dated December 9, 2015 guiding preferential loans to implement social housing policies (amended and supplemented in Circular 20/2021/TT-NHNN dated November 30, 2021) is 250.5 billion VND with 750 customers (at the Bank for Social Policies, Nghe An Province Branch).
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Transaction at a bank in Vinh city. Photo: Thu Huyen |
Recently, in Resolution No. 33/NQ-CP dated March 11, 2023 on a number of solutions to remove obstacles and promote the safe, healthy and sustainable development of the real estate market, the Government assigned the State Bank to preside over the implementation of a credit program of about 120,000 billion VND, directing commercial banks, of which the main ones are 4 state-owned commercial banks (Agribank, BIDV, Vietcombank, Vietinbank) to lend capital to investors and home buyers of social housing projects, worker housing projects, projects to renovate and rebuild old apartments.
The interest rate during the preferential period is 1.5 - 2% lower than the medium and long-term lending interest rates of state-owned commercial banks in the market. The preferential lending interest rate is applied for 3 years for investors and 5 years for home buyers. The lending interest rate applied until June 30, 2023 is 8.7%/year for investors and 8.2%/year for home buyers.
The leader of the State Bank of Vietnam, Nghe An Branch, said: Based on the guidance document of the State Bank of Vietnam, the State Bank of Vietnam Branch has promptly deployed it to credit institutions and credit institution branches in the area. Up to now, banks have issued guidance documents for implementation, however, in Nghe An, according to the report of the Department of Construction, it is submitting to the Ministry of Construction for approval of eligible projects.
Interest rates are still high, preferential period is short
The Government and the State Bank's commitment to provide loan support is a good sign for the real estate market. However, some state-owned commercial banks said that customers are not very interested, and the supply of social housing is limited. Many people and businesses said that the loan package is not attractive...
Ms. Tran Thu Ha, a worker at a factory in Bac Vinh Industrial Park, said that after more than 10 years of moving from Yen Thanh to Vinh to work and live, she and her husband are still living in a rented house. With an income of nearly 20 million VND for both husband and wife, after deducting frugal expenses, the amount of money saved is not worth much, while an apartment in the suburbs also costs nearly a billion VND. Occasionally, she heard about this or that program about lending to buy social housing, but she really did not dare to think about it.
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| State-owned commercial banks are ready to lend a package of 120,000 billion VND. Photo: Thu Huyen |
When asked about the new preferential loan package that the State Bank is implementing, Ms. Ha said that with an interest rate of 8.2%/year, while the preferential loan period only lasts 5 years, it is very difficult and beyond the family's capacity.
In addition to the high interest rate, many people think that the preferential loan period of only 5 years is too short, after that time the interest rate agreed between the customer and the bank is afraid of risks. Therefore, it is necessary to reduce the interest rate and extend it to a minimum of 15 years. The preferential loan interest rate of this package is 8.2%/year for social housing buyers, although better than the current market interest rate, it is still very high compared to the preferential loan interest rate of 5%/year for social housing buyers.
Kim Thi Real Estate Joint Stock Company is investing in building social housing for workers and laborers working in industrial parks in the Southeast Economic Zone in Nghi Xa Commune, Nghi Loc District with a land area of nearly 34,000m2, with a total investment of 320 billion VND. Although appreciating the Government's efforts in supporting interest rates for borrowers and businesses investing in social housing, Mr. Nguyen Dinh Dung - Chairman of Kim Thi Real Estate Joint Stock Company said that the interest rate of 8.5%/year for businesses and the interest rate of 8.2%/year for social housing buyers is too high compared to the ability to pay of low-income people.
Currently, the increase in input materials and interest rates will make it difficult for housing prices to decrease and reach those in need. As a result, low liquidity will continue to make it difficult for both people and businesses to achieve their goals, and the interest rate support program and socio-economic recovery will find it difficult to achieve them.
A credit package to support low-income people to buy social housing is essential, however, some experts and businesses believe that to help the real estate market develop sustainably, there should be more policies to support loans for commercial home buyers. Doing so will help people own houses, clear market liquidity, and encourage more investors to participate in developing affordable housing.
In recent times, the real estate market has had an inappropriate commodity structure, a serious shortage of social housing and low-cost commercial housing, and high transaction prices. In 2023, the key task of the real estate market set by the Government is to promote the development of social housing and worker housing; support investors and home buyers of social housing projects, worker housing, and projects to renovate and rebuild old apartments to borrow capital. However, with the current difficulties, untangling the bottlenecks for low-income people and the real estate market is still a difficult problem.
