Why can't people access preferential capital to buy social housing?
Currently, both social housing project investors and people who want to buy social housing cannot access preferential credit sources. Although regulations on interest rates are in place, in reality, there is no source of money, so banks cannot lend.
Specifically, the preferential loan interest rate at the Vietnam Bank for Social Policies for those who buy, rent-purchase social housing; build new houses or renovate and repair houses for living according to Decree 100 of the Government on the development and management of social housing in 2018 is 4.8%/year (0.4%/month). The overdue debt interest rate is calculated at 130% of the lending interest rate. Those who meet the requirements as prescribed are entitled to borrow for a minimum of 15 years from the date of the first loan disbursement.
Previously, the Prime Minister also issued Decision 117/QD-TTg on preferential lending interest rates of credit institutions designated by the State according to the provisions of Decree 100/2015/ND-CP on development and management of social housing, with the preferential lending interest rate in 2018 being 5%/year (unchanged compared to 2017).
However, in reality, since the 30,000 billion VND preferential credit package ended, businesses and people have not been able to access preferential capital because banks have not had money to disburse.
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Mr. Le Viet (from Thanh Hoa, currently working in Hanoi) said that he had to borrow money at commercial interest rates, about 10%/year, to buy social housing because no bank offered preferential loans. Ms. Thu Trang (from Phu Tho) is also waiting for the Social Policy Bank to launch a preferential loan program.
According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), after 3 years of implementing Resolution 02/2013 of the Government on the preferential credit package of 30,000 billion VND to support project investors and buyers of social housing and commercial housing with a selling price of no more than 1.05 billion VND, the State Bank has directed to end the disbursement of the preferential credit package of 30,000 billion VND from December 31, 2016. Since then, there has been no arrangement of preferential credit capital to implement the social housing policy.
HoREA Chairman said: In mid-2017, the National Assembly Standing Committee sent Document No. 102/2017 to the Government on the detailed allocation plan for the medium-term public investment plan for the period 2016 - 2020 for the remaining capital. In which, this agency agreed to add 2,000 billion VND to the Social Policy Bank and allocate an additional portion to implement the social housing policy.
"However, up to now, the Government and the State Bank have not yet been able to arrange budget capital to recapitalize commercial banks participating in implementing social housing policies," said Mr. Chau.
Therefore, although the State Bank has assigned four credit institutions, namely Vietcombank, VietinBank, Agribank, and BIDV, to participate in implementing the social housing policy, these credit institutions still do not have capital to implement it.
According to Tin Tuc reporters, the Social Policy Bank has not yet implemented loans for social housing purchases.
According to Mr. Chau, currently, both social housing project investors and social housing beneficiaries do not have access to preferential credit sources.
Customers who signed contracts to buy social housing but have not received their houses in 2016 because the project has not been completed will no longer be able to continue to disburse the preferential credit package of 30,000 billion VND from January 1, 2017. These subjects are in difficult circumstances, cannot continue to perform the contract, or have to borrow commercially with the condition of having collateral, or have to borrow from outside the society at very high interest rates.
Investors are more optimistic because they can borrow at commercial interest rates and then calculate it into the cost of social housing projects according to the provisions of the Housing Law. However, in many cases, due to lack of capital, investors have to delay the progress of the project, leading to prolonged unfinished projects, wasting social assets, and buyers cannot receive their houses according to the agreed schedule.
HoREA recommends that the National Assembly, the Government, and the State Bank have a mechanism to implement preferential credit policies for investors of social housing projects according to the provisions of the Housing Law, and allocate an annual budget of about VND 1,000 - 2,000 billion in the period of 2018 - 2020 to Vietcombank, VietinBank, Agribank, and BIDV for implementation. From there, it is possible to mobilize additional capital sources from credit institutions to effectively implement social housing policies.
In the long term, when the economy develops more strongly, the Association recommends implementing a preferential interest rate for social housing loans of 3 - 3.5%/year to create more favorable conditions for low-income urban people.
According to the statistics compiled by the Ministry of Construction, the demand for social housing nationwide in the period of 2011 - 2020 requires about 440,000 apartments. Of which, Ho Chi Minh City needs about 134,000 apartments; Hanoi about 110,000 apartments; Binh Duong 41,250 apartments; Dong Nai 36,700 apartments; Da Nang 11,500 apartments... According to the implementation results of the localities, so far only about 30% of the plan has been implemented.
