Mr. Ho Hung Anh, Chairman of Techcombank at the Conference
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Regarding the legal aspect of projects, Mr. Anh believes that despite some difficulties, many projects have been approved and many projects in different provinces have public land funds and are being put out for bidding. If there is a strong focus, these land funds will be made available. Currently, several large enterprises have been approved as investors.
Regarding the eligible participants for social housing ownership, the recent regulations have undergone some amendments. Now, localities have classified early to determine the eligible participants.
As for accessing bank loans, the implementation depends on each social housing project until capital is mobilized. However, according to the law, it would take around 3-6 months. After completing the foundation, the investor can completely mobilize capital and sell the completed houses in the future.
For investors, if the construction is carried out quickly and the target groups, the buyers, can borrow from banks early on, the amount of capital held by the investors will not be significant.
If investors encounter many legal issues, it could take a lot of time to complete the project and, of course, hold up the capital.
Regarding banks, when granting loans, they focus on the sources of repayment. Mr. Anh believes that the current interest rates are very low. For example, an apartment unit in an industrial park costs only between 200-300 million VND. For a laborer’s family, only 20-30m2 is needed, not 50-70m2. In the city, a 20-30m2 house costs about 400-500 million VND.
According to the current price range for construction, if a profit of 10% is calculated, with an amount of about 200 million VND, Mr. Anh estimates that if the interest rate is 7-8% per year, the citizens would have to pay 14-16 million VND per year. If the loan term is about 20 years, the citizens would only have to pay 10 million VND per year for both interest and principal. This means that each household would only have to pay 2 million VND per month, which is not too high. In reality, the rental prices are not much less. Furthermore, for a house priced at 500-600 million VND, the monthly repayment is only about 3-4 million VND per month with the current interest rate policy.
Mr. Anh believes that previously, banks were cautious about legal matters. They hesitated to use the property as collateral for short-term loans when the land use rights hadn’t been paid for. If now, with the revised Land Law and the Real Estate Law, banks can offer loans for 20-30 years, it would be normal. The pressure on interest rates is very low as well.
He also believes that if social housing wants to develop, there must be a harmony between the State, businesses, and citizens. Businesses should also proactively support their employees.
Currently, Techcombank has been working with some enterprises. The business side has proactively supported their employees in terms of interest rates. Some industrial park enterprises have proactively offered their land funds for social housing construction.
Regarding Techcombank’s side, the bank has proposed a plan to the State Bank of Vietnam to create a common mechanism for commercial banks to participate. Techcombank believes that the difficulty does not lie with the investors. According to Mr. Anh, the bottleneck for social housing lies with the buyers of the project. If there are buyers for the products, the investors will not face any problems.
Techcombank proposes a credit package of around 30 trillion VND with a fixed interest rate of 4.8% for 5 years, similar to the Vietnam Social Policy Bank. They also propose that the State Bank of Vietnam consider credit frameworks, compensate for interest rate and risk policies. Clearly, this segment involves risks. This is one of the reasons why banks are hesitant to lend. If it happens, Techcombank will take responsibility for the associated borrowing risks like normal customers, without being bound by the lending conditions imposed on social housing.
As for the loan term, Techcombank is willing to lend for 20-30 years depending on the repayment ability of the customers and investors.
