VietNamNet Bridge - The Ministry of Construction (MOC) has proposed using preferential loans from official development assistance (ODA) to build social housing projects.

In a document to the Prime Minister June 15, MOC proposed to develop social housing with South Korean ODA capital.

MOC’s Deputy Minister Pham Hong Ha said that Vietnam should follow South Korea’s example in social housing. 

Nguyen Van Duc, deputy director of the Dat Lanh Real Estate Company, noted that if small and medium real estate firms can access preferential loans, they would be willing to invest in social housing development.

Firms hesitate to join the social housing market because of barriers in capital, loan interest rates and development policies.

“I am sure that they will inject money into social housing development projects if there is no specific requirement on technology, design and labor force from the donors,” Duc said.

He went on to say that using ODA capital was a great opportunity for real estate developers to provide products at prices of below VND500 million per apartment, affordable for low income earners.

An analyst said that the VND30 trillion credit package launched by the government to rescue the real estate market has failed completely, noting that it would be more practical to use ODA capital.

“The disbursement of the VND30 trillion-bailout has been going slowly. If the government does not provide other more flexible capital sources, low-income earners will never be able to have houses,” he warned.

Le Huu Nghia, general director of Le Thanh Trade & Construction Company, said if South Korean partners come forward and invest capital to build houses and apartments in accordance with Vietnamese laws, they need to be supported if they can create high-quality products at reasonable prices for Vietnamese.

“Meanwhile, if South Korea lends money to the government of Vietnam which then re-lends to Vietnamese real estate firms, we are willing to develop social housing projects if there are reasonable policies,” he said.

A real estate developer in Hanoi said that ODA capital from South Korea for social housing development should be welcomed, even if South Korea, as the donor, sets requirements on using its technologies or designs. 

Ha revealed that the plan to develop social housing projects on a trial basis in some localities in Vietnam, initiated by MOC and Korean agencies, may get funds allocated in the 2016 fiscal year.

However, the Ministry of Planning and Investment (MPI) has opposed the plan. The ministry said that social housing development is not listed among the priority fields for ODA capital.

Kim Chi