Nguyen Manh Ha, Deputy Minister of Construction, tells Vietnam NewsAgency that housing development will be a key component of nationalsocio-economic development policies and plans for the next five years.
*Will you please explain why the Government's low interest 30 trillionVND (1.41 billion USD) loan package for home buyers and propertydevelopers has been implemented at snail speed?
There are variousreasons, but the first reason I want to emphasise is that this loanpackage does not come out of the State budget. It comes from arefinancing scheme between the State Bank of Vietnam and commercialbanks through re-lending practices.
The 30 trillion VND loanpackage is designed for three types of borrowers — Government officialsand public employees; people serving in the armed forces; and workers oremployers with low incomes or those without houses of their own. Theloans are either given to support potential home owners or potentialhousing developers.
Conditions for approval of the loan packagedepend on whether they are considering commercial houses or low-incomehousing (affordable homes).
Commercial buyers do not have todeclare their monthly income. The only thing they have to show is thecertification of their current housing status. As I mentioned above,people in this group, cannot enjoy the same benefits as those in theaffordable housing scheme.
For people buying affordable homes,the central requirement is that they must have regular monthly incomesthat are charged personal income tax. They must also show theirhousehold registration and incomes before they enter into a contract tobuy a home.
By May 31, 2015 the loan package has assisted insupporting contracts worth a total 14.161 trillion VND - it is about ahalf of the loan package. However, the actual amount of the disbursedmoney was only 7.621 trillion VND, 25.4 percent of the contracts' value.The key reason for the low amount of disbursement is that much of thedisbursement depends on development projects' construction process.
Onething I have to concede is that the implementation of the 30 trillionVND loan policy has faced quite a number of challenges. One difficulthurdle is that someone wishing to purchase a home with a loan mustalready have a contract to buy or lease the apartment from a housingdeveloper or a landlord. In other words, the products – apartments andhomes- must meet all the conditions set out by the loan scheme.
Atpresent, in some localities, particularly Hanoi or Ho Chi Minh City,the number of affordable houses or commercial houses sold at a priceless than 15 million VND/per square meter, around 48,000 USD perapartment, are hard to find.
In addition, developers of housingprojects that want to apply for the loan package, must satisfy a fewconditions themselves - no bad debt and having capital resources equalto at least 30 percent of the loan.
* What measures will theMinistry of Construction adopt to accelerate the development ofaffordable housing projects in the near future?
To increase thesupply of affordable housing, as mandated by the National Strategy forHousing Development for 2020, the Ministry of Construction is now in theprocess of writing a decree to support implementation of the 2014Housing Law.
To speed up the disbursement of the 30 trillion VNDloan package, the Ministry of Construction needs support and cooperationfrom other ministries and sectors to make amendments to financial,credit or tax policies.
In addition, the ministry will continueto review existing applications for the loan package so as to get theloans out as soon as possible. Vietnam set a target of building 10million square metres of social housing, mainly apartment buildings, by2015 to meet low income earners' demands. It would also provide supportfor 400,000 poor families in rural areas who are in need of homes.-VNA
*Will you please explain why the Government's low interest 30 trillionVND (1.41 billion USD) loan package for home buyers and propertydevelopers has been implemented at snail speed?
There are variousreasons, but the first reason I want to emphasise is that this loanpackage does not come out of the State budget. It comes from arefinancing scheme between the State Bank of Vietnam and commercialbanks through re-lending practices.
The 30 trillion VND loanpackage is designed for three types of borrowers — Government officialsand public employees; people serving in the armed forces; and workers oremployers with low incomes or those without houses of their own. Theloans are either given to support potential home owners or potentialhousing developers.
Conditions for approval of the loan packagedepend on whether they are considering commercial houses or low-incomehousing (affordable homes).
Commercial buyers do not have todeclare their monthly income. The only thing they have to show is thecertification of their current housing status. As I mentioned above,people in this group, cannot enjoy the same benefits as those in theaffordable housing scheme.
For people buying affordable homes,the central requirement is that they must have regular monthly incomesthat are charged personal income tax. They must also show theirhousehold registration and incomes before they enter into a contract tobuy a home.
By May 31, 2015 the loan package has assisted insupporting contracts worth a total 14.161 trillion VND - it is about ahalf of the loan package. However, the actual amount of the disbursedmoney was only 7.621 trillion VND, 25.4 percent of the contracts' value.The key reason for the low amount of disbursement is that much of thedisbursement depends on development projects' construction process.
Onething I have to concede is that the implementation of the 30 trillionVND loan policy has faced quite a number of challenges. One difficulthurdle is that someone wishing to purchase a home with a loan mustalready have a contract to buy or lease the apartment from a housingdeveloper or a landlord. In other words, the products – apartments andhomes- must meet all the conditions set out by the loan scheme.
Atpresent, in some localities, particularly Hanoi or Ho Chi Minh City,the number of affordable houses or commercial houses sold at a priceless than 15 million VND/per square meter, around 48,000 USD perapartment, are hard to find.
In addition, developers of housingprojects that want to apply for the loan package, must satisfy a fewconditions themselves - no bad debt and having capital resources equalto at least 30 percent of the loan.
* What measures will theMinistry of Construction adopt to accelerate the development ofaffordable housing projects in the near future?
To increase thesupply of affordable housing, as mandated by the National Strategy forHousing Development for 2020, the Ministry of Construction is now in theprocess of writing a decree to support implementation of the 2014Housing Law.
To speed up the disbursement of the 30 trillion VNDloan package, the Ministry of Construction needs support and cooperationfrom other ministries and sectors to make amendments to financial,credit or tax policies.
In addition, the ministry will continueto review existing applications for the loan package so as to get theloans out as soon as possible. Vietnam set a target of building 10million square metres of social housing, mainly apartment buildings, by2015 to meet low income earners' demands. It would also provide supportfor 400,000 poor families in rural areas who are in need of homes.-VNA
