Promote the development of social housing projects
According to the Ministry of Construction, currently 15/63 Departments of Construction nationwide have reviewed documents and compiled a list of eligible social housing and worker housing projects to submit to the Provincial People's Committee for consideration and publication of a list of 40 projects with a total investment of VND 43,707 billion and a loan demand of VND 18,010 billion.
Of which, 11 provincial People's Committees have announced a list of 24 projects eligible for loans under the 120,000 billion VND credit program with a total investment capital of 31,673.1 billion VND, the loan demand is 12,442.78 billion VND, reaching 10.37% of the disbursed capital in the 120,000 billion VND credit package.
The provinces that have announced projects eligible for loans include: Tra Vinh (2 projects); Tay Ninh (1 project); Ha Tinh (1 project); Binh Duong (4 projects); Ba Ria - Vung Tau (1 project); An Giang (2 projects); Bac Giang (1 project); Kien Giang (2 projects); Bac Ninh (6 projects); Hau Giang (1 project); Da Nang City (3 projects).
The Departments of Construction of other provinces and cities are also reviewing documents and making a list of eligible projects to submit to the People's Committees of provinces and cities for consideration and publication. If the projects are approved for loans, 12,442 billion VND will be disbursed from the 120,000 billion VND incentive package.
If the ongoing projects are completed, the project of 1 million social housing units and worker housing will have gone nearly 1/3 of the way.
The social housing development program for low-income people in urban areas has also completed the investment in construction of 34 projects, with a construction scale of about 14,202 apartments. Currently, 201 projects with about 161,227 apartments are being implemented. With the industrial park worker housing program, 7 projects have been completed, with a construction scale of about 5,314 apartments. Currently, 93 projects with a construction scale of about 127,272 apartments are being implemented.
In the first 7 months of 2023 alone, 10 social housing and housing projects for industrial park workers have been started, with a total of about 19,853 apartments. Of which, 7 social housing projects have a scale of 8,815 apartments; 3 housing projects have a scale of 11,038 apartments for workers.
Regarding the results of implementing the credit support package under Resolution No. 11/NQ-CP on the Socio-Economic Recovery and Development Program, the Ministry of Construction has announced the list of eligible projects for loans on the Ministry's electronic information portal three times and sent it to the State Bank with 24 eligible social housing projects, housing for workers, and renovation of old apartment buildings, with a scale of 20,188 apartments. The total investment for the above 24 projects is about VND 19,014 billion and the capital demand proposed by localities is about VND 7,516 billion.
Need to continue to remove obstacles on loan interest rates
Regarding the remaining difficulties and problems in the development of social housing, the Government also said that the procedures for investment in construction, purchase and sale of social housing are still complicated and lengthy. In particular, determining the price before selling, leasing, or leasing-purchasing social housing invested in construction with non-budgetary capital must be appraised by the provincial State agency, which also takes time and is costly for businesses.
In addition, the regulation that social housing projects must reserve at least 20% of the project area for rent and investors can only sell after 5 years of use is still inappropriate. Because in reality, many projects cannot rent out this area, leading to the situation of apartments being left empty and wasted, while investors cannot sell, leading to not being able to recover capital, causing social waste and reducing investment attraction in social projects for rent...
Removing legal, organizational and especially loan problems will help investors become more interested in social housing.
Regarding the remaining barriers, according to a survey by the Vietnam Real Estate Association (VNREA), issues related to implementation and legality are still pressing issues today. Legal problems are mainly related to land, investment procedures, planning adjustments and site clearance, fluctuations in investment costs, raw materials, and unreasonable housing prices.
VNREA also proposed that there should be strong incentive mechanisms to attract investors, such as policies on land funds, investor selection, land allocation, etc. for social housing projects. At the same time, the investment process must be specific, shortening the processing time from 24-36 months to 12 months. Localities also need to prioritize infrastructure investment outside the project fence so that when social housing projects are implemented, they can be connected immediately, accelerating the implementation of social housing projects from 2024 onwards.
In addition, according to Mr. Nguyen Van Khoi - Chairman of VNREA, the issue of preferential interest rates for social housing buyers is still a barrier for many project owners as well as buyers. VNREA's survey shows that investors and social housing buyers in localities with projects and demand for social housing are having to borrow at high interest rates, equivalent to 8.7%/year for investors and 8.2%/year for buyers.
This reality makes it difficult for investors and buyers to mobilize cash flow. Therefore, VNREA has proposed that social housing investors be allowed to borrow at an interest rate below 6%/year and home buyers at an interest rate below 4.5%/year.
With the removal of legal obstacles and preferential loans, social housing projects can develop strongly in late 2023 and 2024. From there, the project to build 1 million social housing apartments and workers' housing will be completed soon.
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