Removing a series of stalled projects
At the regular Government press conference in early March 2025, the Ministry of Construction said that it is studying and reviewing to propose solutions to establish a National Housing Fund. Up to now, the Ministry of Construction has proactively assigned specialized units to urgently study international experience, review current legal regulations and propose solutions for implementation.
Talking to PV of Lao Dong Newspaper, Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) - said that the support mechanism of the National Housing Fund will include both the development of affordable commercial housing and the development of social housing (NOXH). One of the biggest challenges at present is the stagnation of hundreds of commercial housing and social housing projects.
Mr. Chau said: "For Ho Chi Minh City, there are about 220 projects facing difficulties. Nationwide, the number could be as high as three. If legal barriers are removed, the housing supply will be unblocked, contributing to solving increasingly urgent housing needs.
However, to ensure that the supply is truly available to consumers, the establishment of a National Housing Fund will play an important role. This mechanism not only helps investors focus on developing affordable commercial housing but also supports the goal of building at least 1 million social housing units in the period of 2021 - 2030. When supply increases, according to the law of supply and demand, housing prices will be adjusted more appropriately, while contributing to restructuring the real estate market in a sustainable way".
According to Mr. Chau, the legal system is gradually being perfected. The National Assembly has issued important laws, the Government has decrees and guiding documents to remove barriers in the fields of land, housing and real estate business. These regulations not only help simplify administrative procedures but also create transparency and synchronization in policies, promoting the sustainable development of the real estate market.
In addition, an important step forward is the National Assembly's approval of Resolution 171, allowing a pilot mechanism for negotiating the transfer of land use rights to implement commercial housing projects. This is a solution to help businesses be more proactive in creating land funds and promoting the development of new projects.
In Ho Chi Minh City, more than 250 projects have been registered by businesses to participate in this mechanism, promising to bring abundant supply to the market in the coming time.
Need for a sustainable financial mechanism
Ms. Dang Thi Kim Oanh - Chairwoman of the Board of Directors of Kim Oanh Real Estate Joint Stock Company - said that the big challenge in housing development today is the slow disbursement of loans. Although many projects are completed early, banks are still slow to disburse, causing waste of resources and creating difficulties for both businesses and buyers.
Experts say that the establishment of the National Housing Fund is an important step to mobilize resources and create a stable financial foundation for the real estate market.
The President of HoREA appreciated the fact that banks have begun to support home buyers with preferential credit packages after the meeting on February 11 with the Prime Minister: "Immediately after the meeting, the Asian Bank (ACB) and SHB Bank announced lending programs with attractive interest rates".
However, HoREA has also made a number of recommendations to ensure the stability and transparency of these credit packages. For ACB, the bank is currently applying an interest rate of 5.5%/year for the first 5 years, but has not announced an interest rate policy for the next period. This makes it impossible for borrowers to calculate long-term financial costs. Therefore, the Association recommends that ACB soon announce the interest rate mechanism after 5 years so that customers can proactively plan their financial plans.
Meanwhile, SHB offered a lower starting interest rate, only 3.99%/year. However, this loan package is limited to VND 16,500 billion and will only be applied in 2025. The worrying thing is that interest rates after the first year will be floating, creating great risks for borrowers if interest rates increase sharply in the following years. Therefore, HoREA recommends that SHB provide a clear interest rate mechanism for the following years to ensure stability, avoiding sudden financial pressure on home buyers.
In addition to building a sustainable financial mechanism, businesses believe that it is necessary to apply new technology to reduce social housing costs.
To shorten construction time, ensure quality and speed up construction progress, Ms. Kim Oanh proposed that Vietnam can apply a prefabricated concrete house model to shorten construction time, save costs, ensure durability up to 50 years and be suitable for areas with weak geology.
How Singapore solves housing problems for people
Singapore established the Housing Development Board (HDB) on February 1, 1960 to address the housing crisis and improve the living environment. In the first 3 years, HDB built 21,000 apartments, by 1965 this number reached 54,000 apartments. Currently, more than 1 million apartments have been completed in 24 urban areas, home to 80% of Singapore's population, of which 90% own their own houses.
Thanks to the Homeownership Program, first-time buyers can buy HDB apartments at preferential prices with subsidies. New apartments are supported with a maximum of 120,000 SGD, old apartments up to 230,000 SGD. Singles aged 35 and over can buy Standard, Plus or Prime apartments, with a maximum allowance of 115,000SGD if buying old apartments. From October 2024, single buyers can choose any 2-room Flexi apartment nationwide.
The Singaporean government is also speeding up the progress of housing construction. At least 95% of apartments with 4 rooms or more are for first-time buyers. Since 2018, HDB has deployed BTO apartments with a waiting period shortened to 2-3 years. Despite being affected by the pandemic, from 2024, each year, there will still be 2,000-3,000 shorter- waiting apartments being deployed.
The subjects given priority to buy short-term waiting houses include couples who have just married, families with young children, divorced people with children under 18 years old, the elderly who want to live near their children and families renting public houses of HDB.
