The HCM City Real Estate Association has proposed social housing lending rates be lowered to 3-3.5 per year to create favourable conditions for low-income earners to afford homes.

This was highlighted in the association’s document recently submitted to the Government about its recommendations for completing social housing policies as Viet Nam was developing a project on the 2021-30 comprehensive social housing policy in Viet Nam.

The association’s president Le Hoang Chau said that in the long term when the economy improved, the social housing lending rates should be kept at around 3-3.5 per cent

The association also proposed the same interest rate for social housing purchasing at the Viet Nam Bank for Social Policies and four commercial banks – Vietcombank, Vietinbank, Agribank and BIDV – which were appointed to join the VND30 trillion (US$1.29 billion) package worth of preferential loans for social housing buyers and developers.

Currently, the social housing lending rates provided by the Viet Nam Bank for Social Policies ranged between 3-4.8 per cent in 2019. The rate which social housing buyers paid for their outstanding loans from the VND30 trillion package was 5 per cent this year.

Policies to encourage the development of social housing projects and low-price commercial housing projects for lease, such as preferential corporate income tax rates and credit incentives, should also be raised, the association said.

The association also proposed the Government allow the development of rooms for rent with an area of less than 25sq.m per unit.

According to statistics of the Ministry of Construction, Viet Nam needs around 440,000 social housing units in 2011-20. However, the supply meets only 30 per cent of demand, according to the association.

The association said that social housing development faced difficulties due to the lack of financial resources from the Government to provide preferential loans to both buyers and developers. — VNS