Photo: Duc Anh
Real estate association proposes $45 billion in government support be provided in 2016-2020 period.
The Ho Chi Minh City Real Estate Association (HoREA) has proposed the government provide support of VND1 trillion ($45 billion) to social housing in the 2016-2020 period.
It recognized that annual funding for housing policy in the five years will depend on the availability of State budget funds. The first year of implementing the new housing policy under the Law on Housing 2014 is this year.
Mr. Le Hoang Chau, HoREA Chairman, told VET that the Association has proposed the funding several times but the government has not been forthcoming.
Homebuyers are asked to make monthly savings under the proposal in order to receive incentives and discounts when their turn comes to buy social housing. They can choose to make monthly savings from now or from the day of signing a credit contract. Savings must have been made for 12 months before buying social housing.
The proposal states that the interest rate should be equal to the rate applied on terms of more than 12 months under the policy of the State Bank of Vietnam. “This encourages homebuyers to generate resources,” Mr. Chau added.
HoREA also proposed that they receive a higher interest rate due to the long-term nature of such savings.
The VND30 trillion ($1.34 billion) housing credit support package was launched in mid-2013 and targeted low-income earners, increasing supply and demand of low-cost housing and improving market liquidity. Only one-third of the package was spent on social housing, however, according to Mr. Chau. “This proposal will resolve the need for social housing not only in Ho Chi Minh City but also nationwide.”
Social housing is a priority for many cities and provinces around the country next year, in order to deal with housing issues for workers and low-income earners. There are more than 80,000 households and individuals in need of social housing in Ho Chi Minh City, according to the Ho Chi Minh City Institute for Development Studies. In the 2015-2020 period the country is estimated to need 200,000 additional social housing apartments.
A recent report from HoREA revealed that the city’s property market has experienced some instability. Market transactions fell slightly in the second quarter, it wrote, while at the beginning of the third quarter it has seemed unusually crowded after a wide range of products from large projects have been launched.