The bottleneck in the supply of social housing is about to be resolved. According to the Ministry of Construction, from 2021 to the end of the second quarter of 2024, there will be 619 social housing projects nationwide with a scale of 561,800 units.
To date, the total number of social housing apartments started and completed has reached about 35.6% of the target of the project to build 1 million social housing units by 2025.
Businesses are also expecting that the regulations in new laws including the 2024 Land Law, the 2023 Housing Law and the 2023 Real Estate Business Law will create a "domino" effect, resolving long-standing problems of social housing projects.In addition, focusing on investing in social housing projects will help balance supply and demand, thereby promoting a faster recovery of the real estate market.
However, when this bottleneck is removed, there will be new barriers that make it difficult for low-income people to access social housing.That is the story that from August 1, 2024, the social housing loan interest rate will be adjusted up from 4.8%/year to 6.6%/year, meaning the social housing loan interest rate at the Social Policy Bank will increase by 1.8%/year compared to before.The overdue debt interest rate is also regulated at 130% compared to the normal loan interest rate.
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA) said that this interest rate is only slightly lower than the current loan interest rate of 8%/year of the VND 120,000 billion credit package and lower than the previous commercial credit interest rate but is still high.
According to Mr. Chau's opinion, the regulation on loan interest rates for poor households according to the poverty line prescribed in each period at the Social Policy Bank is 6.6%/year applied for 2024, which is too high compared to the current lending interest rate at commercial banks.Typically, Vietcombank is lending for consumption with a loan amount of up to billions of VND with a loan interest rate of 4.2-5%/year, without requiring collateral but only needing to prove the ability to repay the debt.
In addition, Mr. Le Hoang Chau also commented that there seems to be a mistake in assessing the nature of the loan when renting or buying social housing.It is necessary to clearly understand that the loan for renting or buying social housing through the Social Policy Bank is medium- and long-term, up to 25 years, different from the preferential loan for poor households, which is only about 3 years.Therefore, applying the same medium- and long-term loan interest rate as the loan for poor households will make borrowers feel insecure, because the interest rate is constantly changing, even changing annually, and is not fixed. "The Association proposes to consider applying a loan interest rate of 3%/year for buyers and renters of social housing at the Social Policy Bank.
At the same time, the Association proposes that the Prime Minister consider reducing the loan interest rate for poor households according to the poverty line prescribed in each period of borrowing capital at the Social Policy Bank from 6.6%/year to 3-4.8%/year," said Mr. Le Hoang Chau.
