The Ho Chi Minh City Real Estate Association (HoREA) has just sent a document to the Prime Minister, the Ministry of Construction and the State Bank regarding the VND120,000 billion credit package.
Accordingly, HoREA believes that the 120,000 billion VND credit package is not a preferential credit package for social housing.
Because, if it is a preferential credit package for social housing, it must ensure two criteria. Firstly, the low interest rate for investors and buyers, and the rental purchase of social housing is usually 50% of the commercial loan interest rate, as the current preferential interest rate is 4.8 - 5%/year and this preferential interest rate is determined annually.
Second, the preferential loan term is long-term, as Decree 49/2021/ND-CP stipulates the maximum preferential loan term of 25 years applicable to buyers and renters of social housing and 5 years for investors of social housing projects.
Meanwhile, HoREA said that the State Bank's regulation of an interest rate of 8.2%/year applicable to buyers and renters of social housing, workers' housing, housing in renovation and reconstruction projects of apartment buildings... is still too high compared to the financial capacity of low-income people.
The association cited, for example, a social housing apartment costs 1 billion VND, a 20% down payment is 200 million VND and a loan of 80% is 800 million VND. With an interest rate of 8.2%/year, just to pay the interest in the first year, the borrower must pay an average of 5.46 million VND/month, and must also pay part of the principal.
The interest rate of 8.7%/year applied to investors of social housing projects, worker housing projects, and apartment building renovation and reconstruction projects is quite suitable and has a positive impact on investors when currently, loan interest rates are very high, up to 12-13%/year.
Along with that, HoREA said that the State Bank stipulated that the interest rates of the VND120,000 billion credit package are determined periodically every 6 months; accordingly, the interest rates of 8.2%/year and 8.7%/year applied until June 30, 2023 make borrowers feel more "insecure".
“The preferential period of the VND120,000 billion credit package for home buyers is only 5 years, which is too short. In particular, the preferential period for investors of social housing projects, worker housing projects, and projects to renovate and rebuild apartment buildings within 3 years is only suitable for medium-scale projects but not suitable for large-scale projects,” HoREA stated.
In addition, HoREA said that the Social Policy Bank still has nearly 11,000 billion VND left to lend to buy or lease social housing, but because there is no social housing, there are no borrowers.
If the average loan rate is 600 million VND/apartment, with a capital source of 11,000 billion VND, the Social Policy Bank can still lend to about 18,000 people to buy social housing.
Therefore, according to HoREA, if there is a supply of social housing, buyers and renters of social housing will certainly choose to borrow preferential loans of 4.8%/year from the Social Policy Bank. At that time, the VND120,000 billion credit package may be "unsold" when buyers and renters of social housing do not choose to borrow.
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