Top bank denies builders' cheap loans

Monday, Sep 19, 2016 09:00

The My Dinh II residential area in Nam Tu Liem District, Ha Noi. The State Bank of Viet Nam (SBV) will not extend the eligibility deadline for low-interest home loans to housing developers who signed loan contracts before March 31st, 2016. — VNA/VNS Photo Tuan Anh
HA NOI (Biz Hub) — The deadline for social housing developers who signed borrowing contracts before March 31, 2016 to get cheap loans from the VND30 trillion stimulus package will not be extended to December 31 this year as they wished. However, capital disbursement for low-income buyers still continues.

Earlier, the HCM City Real Estate Association submitted a proposal to the State Bank of Viet Nam (SBV), asking the central bank to allow social housing developers to continue getting loans at preferential interest rates from the VND30 trillion (US$1.34 billion) package until the end of the year.

In response, SBV confirmed that after asking for opinions from the Ministry of Construction, the Ministry of Finance, as well as balancing the interests of the Government and people, the loans would not be disbursed because the real estate business has certain profits while already enjoying preferential policies of taxes and land rental when building social housing. The disbursement extension for home buyers means indirect support for businesses.

In addition, the Government has prioritised low interest loans to improve living conditions for the needy rather than for housing developers.

The disbursement progress to developers was slow due to construction delays, the central bank said, adding if the proposal is approved, it would create a bad precedent and property companies would be more reliant on Government support.

The SBV will only allow the capital disbursement to be continued for individual borrowers of social housing projects till the end of this year.

The interest rate for the loans this year was set at 5 per cent, 1 per cent lower than last year.

HCM to build projects

The municipal Department of Construction says about 39 social housing projects with 43,700 apartments are under construction. The department has also reviewed the area of 94 commercial housing projects in a plan to use a part of them for around 157,000 apartments for low-income earners.

It said developing projects for low-income earners has been one of most important solutions to resolve the unlicensed houses in the city. Since the effectiveness of the Law on Housing 2006, the city has approved the construction of 51 social housing projects with more than 46,500 apartments; 12 projects were completed, providing 3,886 apartments.

In addition, real estate firms also completed 35 projects for workers with 5,500 apartments housing 40,000 workers.

Tran Trong Tuan, the department's director, predicts the demand for low-cost housing in the city over the next five years would be huge. — VNS

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