This was pointed out in the report of the Ministry of Construction at the Conference on Difficulties Removal and Promotion of Social Housing Development that the Government held with ministries and localities on March 16, under the chairmanship of Prime Minister Pham Minh Chinh.
Social housing supply situation
The Ministry of Construction said that some key localities, despite having a high demand for social housing, still have limited investment in social housing compared to the targets set by the Project until 2025. For example, Hanoi has only 3 projects with 1,700 units, meeting 9%; Ho Chi Minh City has 7 projects with nearly 5,000 units, meeting 19%; Da Nang has 5 projects with 2,750 units, meeting 43%…
Hanoi residents draw lots for the only social housing project in 2023 (photo: Ngoc Mai).
Furthermore, some localities have not initiated any social housing projects from 2021 until now, such as Ha Giang, Cao Bang, Dien Bien, Lai Chau, Vinh Phuc, Ninh Binh, Nam Dinh, Quang Ngai, Quang Binh, Kon Tum, Gia Lai, Long An, Vinh Long, Soc Trang…
Regarding the VND 120 trillion support fund for social housing construction, the Ministry of Construction said that so far, banks have committed to providing loans for 15 projects with an amount of about VND 7,000 billion; among them, 8 social housing projects in 7 localities have been disbursed with a capital of about VND 640 billion. The Ministry of Construction believes that the disbursement has been slow.
Incentive policies are not attractive
Regarding the limitations of the social housing supply situation, the Ministry of Construction pointed out that the mechanisms and policies for developing social housing and housing for workers have not met practical needs and have not been timely supplemented and amended.
“Investment procedures, conditions for buying, leasing, and renting social housing are still complex and time-consuming; preferential policies for social housing projects, housing for workers issued so far have not been attractive enough,” the report of the Ministry of Construction stated and clearly pointed out the lack of interest of many localities in developing social housing and housing for workers and laborers in industrial zones; failure to clearly determine land funds for social housing development in urban planning and industrial zones…
High demand for social housing, but Hanoi is slow in implementation.
According to the Ministry of Construction, some large cities with a high concentration of low-income workers and a high demand for social housing have a low rate of social housing registration formed in 2024, such as Hanoi with 1,181 units, Ho Chi Minh City with 3,765 units, Da Nang with 1,880 units, Can Tho with 1,535 units…
Regarding the funding support for social housing development, the Ministry of Construction explained that the VND 120 trillion package has not been effectively disbursed due to the constraints of announcing the list of qualified social housing projects for loan purposes.
Until now, there have been 129 social housing projects with a scale of 114,934 units started construction, but only 28 localities have announced the list of 68 projects that meet the loan program’s conditions with a capital demand of over VND 30,000 billion.
Additionally, some social housing project investors do not meet the credit requirements for borrowing, such as not meeting the credit balance conditions, not having other assets to provide credit guarantees. The interest rate and the interest rate period are not truly attractive to borrowers, according to the Ministry of Construction’s assessment.
Proposal to reduce interest rates for the VND 120 trillion loan package
In Resolution No. 01 issued by the Government at the beginning of 2024, the Prime Minister assigned the goal of striving to complete about 130,000 social housing apartments nationwide this year.
To achieve the assigned target, the Ministry of Construction has proposed various solutions, including resolving difficulties and obstacles in investment procedures, waiving land use fees, planning, allocating land, developing accommodation for workers…
The Ministry of Construction has proposed that the State Bank of Vietnam continue to study and consider lowering the interest rate for loans from the VND 120 trillion funding support source to be suitable for practical conditions in each stage. For localities, the Ministry of Construction has proposed reviewing and supplementing urban planning, industrial zone planning, ensuring sufficient land funds for social housing development.
According to the Ministry of Construction, specific mechanisms and solutions need to be in place to streamline administrative procedures for project establishment, approval, land allocation, land leasing, land clearance, investment procedures for construction projects… to support and encourage enterprises to implement investment and construction projects, create housing supply for the market, and make effective use of preferential funding for social housing development.
