In preparation for the upcoming conference on promoting social housing and the healthy and sustainable development of the real estate market, HoREA has developed a series of recommendations on solutions to encourage the development of affordable commercial housing.

Specifically, regarding capital issues, the Association proposed that the Ministry of Construction and the State Bank of Vietnam (SBV) submit to the Prime Minister for consideration and decision on a lending interest rate of 4.7%/year for poor households borrowing in 2025 at the Vietnam Bank for Social Policies, to implement preferential lending policies to buy, hire-purchase social housing; build or renovate and repair houses according to the provisions of Decree 100.

Accordingly, buyers and renters of social housing are entitled to borrow at an interest rate equal to the lending interest rate for poor households as prescribed by the Prime Minister from time to time.

Currently, the lending interest rate for poor households in Official Letter No. 4524 dated August 1, 2024 of the Vietnam Bank for Social Policies is 6.6%/year. HoREA believes that this lending interest rate is too high.

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The Ho Chi Minh City Real Estate Association proposed that the State Bank consider building a mechanism for young people buying their first home to borrow credit at reasonable commercial interest rates, about 6-7%/year. Photo: Hoang Ha

Along with that, HoREA also recommended that the State Bank consider building a mechanism for young people (aged 18-45) buying their first home to borrow credit at reasonable commercial interest rates (about 6-7%/year, with the loan secured by the house itself) for a period of 10-15 years.

This policy, according to the Association, will create a "push" to encourage businesses to restructure existing real estate projects, shift investment to the affordable commercial housing segment, and together with the Program to develop at least 1 million social housing apartments in the 2021-2030 period, will restructure the real estate market to be safe, healthy, and sustainable.

“Most young people still have a long time to do business and pay off debts. Usually after about 10-15 years, their income will double or more than double, so there is almost no risk for commercial banks to lend,” HoREA argued.

In addition, HoREA also proposed that the Ministry of Construction consider submitting to the Prime Minister and competent authorities to consider supplementing the Law on Value Added Tax and the Law on Corporate Income Tax to stipulate that "In case of building social housing for rent, the value added tax rate is 3% and the corporate income tax rate is 6%" to encourage businesses to invest in building social housing for rent only.

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