Why is preferential social housing still difficult to buy?

Focus on social housing

Accordingly, the preferential lending interest rate at the Vietnam Bank for Social Policies applied to loans with outstanding balance for purchasing, leasing social housing (NOXH), building new houses or renovating and repairing houses for living is 4.8%/year. The Vietnam Bank for Social Policies is fully responsible for the contents, data reported and proposed. This Decision takes effect from May 10 to December 31, 2024.

Previously, the Government also announced a VND120,000 billion credit package for social housing loans. Four commercial banks are implementing the loans, including Agribank, BIDV, Vietcombank and VietinBank, with interest rates ranging from 8.2 - 8.7%/year. Of which, customers can borrow at an interest rate of 8.2%/year for 5 years and businesses can borrow at an interest rate of 8.7%/year for 3 years.

Recently, the Governor of the State Bank also assigned four major commercial banks, namely Agribank, BIDV, Vietcombank and VietinBank, to provide preferential credit packages for purchasing social housing at an interest rate of 5% per year. This decision of the State Bank takes effect from January 1, 2023. The interest rates applied by commercial banks in 2023 for outstanding loans to support housing purchases under this package are not related to the VND 120,000 billion package. In fact, commercial banks have been lending under this credit package since 2013, with an interest rate of 6% per year. In 2019 and 2020, it was reduced to 5% per year and has remained at 4.8% per year since 2021.

Many social housing projects in Ho Chi Minh City have been delayed after starting construction due to legal issues.

Not only capital, on April 3, 2023, Deputy Prime Minister Tran Hong Ha signed Decision 338/QD-TTg of the Prime Minister approving the investment project to build at least 1 million social housing units for low-income people and industrial park workers in the period of 2021 - 2030. The project aims to develop social housing and worker housing at prices suitable to the affordability of middle-income and low-income households in urban areas and of workers and laborers in industrial parks and export processing zones. By 2030, the total number of apartments completed by localities is expected to be about 1,062,200 units. Of which, about 428,000 units will be completed in the period of 2021 - 2025; about 634,200 units will be completed in the period of 2025 - 2030.

According to the Ministry of Construction, in the first quarter of 2023, there were 418 social housing projects being implemented nationwide, with a construction scale of about 432,400 units. Currently, non-state commercial banks are also being encouraged to participate in lending credit packages to investors and social housing buyers in each period. In localities, the government is also promoting the social housing construction program to meet the huge housing needs of the people. It can be said that the social housing segment has never been as interested and focused as it is today.

Have money but no house to buy

Despite receiving much attention, in reality, many paradoxes are occurring in the social housing segment. That is, there is money but there is a lack of houses to buy.

Chairman of the Ho Chi Minh City Real Estate Association (HoREA) Le Hoang Chau said that recently the Bank for Social Policies admitted that the credit package for loans to buy and lease social housing with an interest rate of 4.8%/year has a surplus of more than 11,000 billion VND because there are no borrowers because there are no houses to buy. Meanwhile, the 120,000 billion VND package is only a commercial credit package with interest support for people and businesses. In the short term, this package is beneficial for investors because the loan interest rate is cheaper than the current commercial interest rate of up to 12 - 15%/year. But so far, no businesses have been found to lend because no projects have been approved. Many projects in Ho Chi Minh City have started construction for the past year but are "covered" there due to procedural problems. There are no products, which leads to people not having houses to borrow to buy.

According to Mr. Chau, the VND120,000 billion package is like a sedative package and does not have much effect when the interest rate for home buyers is still too high, up to 8.2%/year. With this interest rate, poor people will not dare to borrow. In addition, the fixed interest rate of 8.2% only lasts until June 30, from July 1 onwards, a new interest rate will be announced every 6 months. Meanwhile, this package is only valid for 5 years for home buyers, and for investors, it is 3 years. After this period, customers must negotiate with the bank to borrow at the agreed interest rate, which is too risky. Not to mention, for people, paying the principal and interest within 5 years with an interest rate of 8.2%/year is already a burden.

"The Ministry of Construction needs to firmly submit an additional credit package of VND110,000 billion, with an interest rate of 4.8 - 5%/year like the previous VND30,000 billion package. The authority to issue this credit package belongs to the National Assembly Standing Committee. Although this credit package only meets 30% of the need to build 1 million social housing units, with this seed capital, commercial banks can mobilize enough to implement the above project," Mr. Le Hoang Chau suggested.

Lawyer Hoang Thu, Ho Chi Minh City Bar Association, also said that the biggest problem at present is that these credit packages are difficult to disburse due to the lack of projects. The most troublesome of these is the adjustment of planning for social housing projects to be converted from commercial housing and the policy of exempting land use fees, not collecting land use fees for social housing projects, worker accommodation, student dormitories, housing for armed forces, public housing, housing for resettlement under state projects, and rebuilding apartment buildings. Up to now, the provisions of the law have not determined which cases are exempted, which cases are reduced land use fees, land rent. This also "unintentionally" makes it difficult for local state agencies to enforce the law.

In addition, because point a, clause 1, article 58 of the 2014 Housing Law stipulates that investors of social housing projects are exempted from land use fees and land rent. Therefore, first of all, localities must carry out administrative procedures to determine specific land prices and appraise land prices. Once the land use fee is available, the provincial People's Committee will issue a decision on land use fees and land rent, and then issue a decision to allow exemption from land use fees and land rent. This process is very cumbersome, takes too much time, effort and is unnecessary.

The government has announced credit packages with incentives, but people and businesses still have difficulty accessing them for many reasons. Another problem is that there is currently a lack of social housing products for people to borrow to buy. Therefore, it is necessary to remove legal obstacles so that many projects can be implemented and more houses can be supplied to the market. It is also necessary to criticize many localities that invest in social housing in unfavorable locations, so no one buys them, such as Hanoi and Ho Chi Minh City.

Mr. Le Hoang Chau

If the land use fee for the social housing project is exempted, the law stipulates that it is exempted and there is no need to carry out procedures for determining land prices, calculating land use fees, and exempted land rent according to the provisions of the law on land. Doing this will save a lot of time for businesses. From there, social housing products will be quickly launched to the market and credit packages will be activated.

Attorney Hoang Thu

Source link: https://thanhnien.vn/nha-o-xa-hoi-uu-dai-sao-van-kho-mua-185230512123820071.htm