As of May 5, 2023, the Vietnam Sanitary and Phytosanitary Notification Authority and Enquiry Point (SPS Vietnam) had not received any notice from the General Administration of Customs of China (GACC) regarding the “Certificate of GACC registration” form with a QR code and a link to www.aqsiq.net.

This information was disclosed by the SPS Vietnam Office in a document sent on May 5 to relevant agencies including the Plant Protection Department and Department of Animal Health under the Ministry of Agriculture and Rural Development and the Vietnam Food Administration under the Ministry of Health regarding the information on social networks on this form. Its content relates to the certification of registration numbers of companies exporting agricultural products and food to China.

The office said the results of registering enterprises producing, processing, preserving and exporting agricultural products and food to China will be made public by GACC.

Enterprises should contact the SPS Vietnam Office for more information relating to the registration process, it added.

Vietravel Airlines signs aircraft lease agreement with Cambodia Airways

Vietravel Airlines, a member of Vietravel Corporation, on May 5 inked an aircraft lease agreement with Cambodia Airways, a step forward in expanding its fleet as planned for the third quarter of this year.

Under the agreement, the Vietnamese carrier will receive an Airbus A319 on May 20, raising its fleet to four, and two others in July.

Vu Duc Bien, a representative from Vietravel Airlines, said the event is expected to create a turning point in the carrier’s development, towards expanding its domestic and international routes.   

Currently, Vietravel Airlines, which made its debut in late 2020, is operating flights between HCM City/Hanoi and Da Nang, Quy Nhon and Phu Quoc, and between HCM City/Hanoi and Bangkok (Thailand), along with charter flights between Daegu (the Republic of Korea) and Cam Ranh.

With the new planes, it expects to launch more domestic and international flights from/to Cam Ranh and Da Nang in the third quarter, and charter flights to China, Taiwan (China), the RoK and Japan.

As of the first quarter of 2023, Vietravel Airlines had operated over 11,600 flights safely and carried close to 2.5 million passengers, with an average occupancy rate of 93.7%.

Aquatic export turnover drops 28% in April

Vietnam’s aquatic product exports in April plummeted 28% year-on-year to 810 million USD, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

In the first four months of this year, the value stood at over 2.6 billion USD, down more than 31% from the same period last year.

Le Hang, Communications Director of VASEP, pointed out that domestic firms are still under pressure of plummeting consumption and dropping export prices given surging production costs.

In the four-month period, decreases in export revenue were seen in major markets like the US and China, with 57% and 37% to 418 million USD and 435 million USD, respectively.

The exports of main items such as tra fish (pangasius) and shrimp experienced sharp declines of 46% and 44% to 600 million USD and 891 million USD, the association said.

Some enterprises said that the number of orders decreased more than 30% between January and April, forcing them to give workers rotational leave.

Speaking at a conference held by the Ministry of Industry and Trade late April, VASEP’s Vice Secretary General Nguyen Hoai Nam noted that aquatic product exports are predicted to face more difficulties this year.

He proposed the Government offer low-interest credit packages in support of businesses, farmers and fishermen, thus helping the sector stay afloat this year, and recover when the consumption market gets better.

Taiwan’s Quanta group to produce 4.5 million computers in Nam Dinh

The Management Board of Industrial Parks in the northern province of Nam Dinh on May 5 granted an investment licence to Quanta Computer Inc. of Taiwan (China) to produce laptops and desktops on an area of nearly 226ha in My Thuan Industrial Park, My Loc district.

The factory, costing over 2.8 trillion VND (121.7 million USD), has a designed capacity of 4.5 million units each year.

Scheduled to be operational in the fourth quarter of 2024, the factory will enter a period of accelerated production with 2.6 million computers from 2025, toward producing 4.5 million units annually by 2028.

Permanent Vice Chairman of the provincial People’s Committee Tran Anh Dung said it is the first project in My Thuan - an IP designated to high-tech industry development located in a favourable location in terms of transport infrastructure and logistics service connection.

Nam Dinh commits all possible support to and always accompanies the investor in solving difficulties related to legal procedures during the project implementation, he said.

Established in 1988, Quanta is now listed among the top 500 companies globally and also one of the world’s leading laptop manufacturers.

Quanta has eight major laptop factories worldwide located in China, the US, Mexico, Germany, Japan, the Republic of Korea and Thailand, with total annual revenue of over 40 billion USD.

Hanoi attracts over 1.7 billion USD in FDI in four months

The capital city of Hanoi attracted over 1.7 billion USD of foreign direct investment (FDI) in the first four months of this year with 103 new projects worth 35.2 million USD and 50 projects permitted to increase investment capital by 91.8 million USD.

According to the city’s Statistics Office, during the period, 105 foreign investors contributed capital and bought shares worth 79.9 million USD. Japanese investor Sumitomo bought shares of VPBank with a transaction value of 1.5 billion USD.

During the four months, Hanoi had 10,300 new enterprises, up 13% over the same period last year. Their registered capital reached 93.1 trillion VND, down 24% over the same period last year.

Meanwhile, 1,200 enterprises in the city were dissolved in the last four months, marking an increase of 2% compared to that of the same period last year.

Moreover, 1,413 enterprises are completing procedures for dissolution, up 7%, and 11,800 enterprises registered to suspend operations, up 25%, while 4,200 enterprises resumed operations, down 22% over the same period.

Total retail sales of consumer goods and services in the city in the first four months of this year reached 244 trillion VND, up 11.2% over the same period.

Hanoi attracted nearly 1.01 million foreign visitors, 11 times higher than the same period last year.

In addition, the city’s export turnover of goods reached 5.3 billion USD, down 1.3% over the same period last year. Exports by the domestic economic sector reached 2.9 billion USD, up 0.8% while exports by the FDI sector hit 2.4 billion USD, down 3.8%.

In the first four months of 2023, the city’s index of industrial production (IIP) increased by 1.6% over the same period last year, of which the processing and manufacturing industry climbed by 1.2%; electricity production and distribution went up by 3.8%; water supply and garbage and wastewater treatment rose by 8.4%; and mining decreased by 8.1%.

Some manufacturing industries with the IIP in the first four months of the year increased compared to the same period last year were beverage production, up 24.9%; wood processing and wood products increased by 21.4%; production of drugs, pharmaceutical chemicals, and medicinal materials increased by 13.6%; production of metal products increased by 13.1%; tobacco production increased by 6%.

However, industries with the decreased IIP over the past four months were machinery and equipment manufacturing (34.6%); printing and copying records (20.1%); textile (6.6%), and metal production (5.8%).

Production of leather and related products also had the IIP decreased by 5.8%; garments by 4.5%, and production of rubber and plastic products by 4.3%.

According to the Ministry of Industry and Trade, industrial production in the first quarter of this year was less than that of the same period last year as the global economic slowdown was faster than expected, and the sharp decline in demand from abroad caused the decline in orders.

Moreover, in the first quarter, the price of input fuel and global energy remained high, which affected the production costs of domestic enterprises while the inflation rate remained high and monetary policy has not been loosened. The slow recovery of the world economy and the collapse of some banks in the world had certain impacts on Vietnam.

Meanwhile, domestic purchasing power, although recovered, was still weak, so it failed to stimulate production, investment, and consumption.

According to the ministry, there remains a lack of linkage between the domestic market and manufacturing industries. Inflationary pressures and high-interest rates also affected the consumption of luxury products such as automobiles or common products such as textiles, footwear, or footwear.

Enterprises have still found difficult to access capital, especially business in the manufacturing and processing industries as they are facing difficulties due to lack of orders.

Major gap between domestic, international standards

The National Standardisation Strategy for 2030 has set a target of raising Vietnam’s harmonisation ratio with international, regional and foreign standards to at least 65% by 2025 and 75% by 2030.

As Vietnam is integrating into the global economy, and becomes a member of the World Trade Organisation (WTO), the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) forum, as well as new-generation free trade agreements, the country has to observe stringent regulations and requirements on technical standards in foreign markets.

In fact, Vietnamese goods draw warnings from foreign countries repeatedly due to their failure in satisfying technical standards and barriers set by importers.

The Vietnam Sanitary and Phytosanitary Notification Authority and Enquiry Point (SPS Vietnam) under the Ministry of Agriculture and Rural Development reported that last year it received nearly 1,000 notices relating to food safety and animal and plant quarantine. The complaints are up 10% year-on-year, mostly from Japan with 83 notices, followed by Brazil, the EU, Canada, and the US. 

To handle this issue, Vietnam must raise its standards harmonisation ratio toward international acceptance.

According to the Directorate for Standards, Metrology and Quality, Vietnam’s current national standards system, with over 13,500 standards in most economic sectors, has the harmonisation ratio of over 60% with regional and international standards.

Despite a remarkable number of national standards, Vietnam’s Global Quality Infrastructure Index scored only 54, behind many countries such as China, Japan, the Republic of Korea (RoK), India, Indonesia, Singapore, and Malaysia.

Currently, its national standards are built and managed by 13 ministries. However, the process has shown a lack of long-term orientations and consistency among them.

The SPS suggested Vietnam raise its harmonisation ratio with international standards to respond to trade barriers imposed by other member countries of the FTAs and reduce violations.

To meet the Government’s target by 2030, Vietnam needs to quickly build and issue the standardisation strategy, striving to become a member of the International Organization for Standardisation, and the International Electrotechnical Commission in 2025.

The country also needs to complete building a database for the national standardisation system and complete the digital infrastructure connected with ministries, agencies and localities.

HCM City to host VietFood & Beverage Expo in August

The 27th VietFood, Beverage and Professional Packing Machines (VietFood & Beverage – ProPack) International Exhibition will take place in Ho Chi Minh City from August 10-12 at the Saigon Exhibition and Convention Centre (SECC).

The annual event will be held by the Vietnam National Trade Fair and Advertising Company (Vinexad) under the Ministry of Industry and Trade in Ho Chi Minh City in August and Hanoi in November.

Covering 20,000 sq.m, the exhibition will showcase agro-forestry-aquatic products, beverages, nutritional foods, supplements and food additives at 750 booths by 650 businesses coming from 18 countries and territories, including India, China, the Republic of Korea, and Singapore, among others.

Vinexad said the exhibition will offer chances for domestic and foreign firms to access markets, popularise products, and strengthen the brands.

The event is expected to help businesses explore the market demands and design their development strategies and optimise the EU-Vietnam Free Trade Agreement (EVFTA).

In the 26th edition in 2022, the expo attracted nearly 17,000 visitors including stakeholders in the sector, importers, distributors, retailers, and shoppers.

According to Vietnam Report's survey in August 2022, nearly 90% of food businesses have achieved over 80% productivity compared to the pre-COVID-19 period, of which 60% of the firms have exceeded productivity levels before the pandemic.

Vietnam showcases farm produce at Macfrut trade fair in Italy

The Vietnamese Embassy in Italy is showcasing Vietnam’s fruits, vegetables and spices at the 40th Macfrut international trade fair in Rimini city in the Emilia Romagna region from May 3-5, within the framework of the Vietnam-Italy Year 2023 to celebrate the 50th anniversary of bilateral diplomatic ties and the 10th anniversary of strategic partnership.

The event drew the participation of many international partners, with the number of exhibitors increasing by 50% from last year’s edition, from the Middle East, Europe, Latin America, Africa and Asia.

Vietnamese farm produce on display include dragon fruit, pomelo, mangosteen, mango, pineapple, along with various types of tea, coffee, dried fruits, processed foods, and spices.

On this occasion, Mayor of Rimini city Jamil Sadegholvaad handed over a letter of support for activities of the Vietnam-Italy Year 2023 to Vietnamese Ambassador to Italy Duong Hai Hung.

At the event, Ambassador Hung stressed that Vietnam is the world's eighth largest exporter of fruits, accounting for 3.8% of the total fruit exports. Compared to all other Asian countries with similar agricultural strengths, only Vietnam has a free trade agreement with the European Union (EU), providing a significant advantage if Vietnam and Italy cooperate and combine their strengths in agricultural production and trade not only in Italy but also in the region and the world.

Vietnam is not only an important supplier of agricultural products but also a large market with great potential as it has nearly 100 million domestic consumers. The rapid increase of the middle class after decades of high economic growth has led to an growing demand for premium Made-in-Italy products in Vietnam, he said.

It is the third time Vietnam has directly introduced signature fruits and spices to Italian businesses and people, in the context of European and Italian consumers showing their growing interest in consuming tropical fruits, especially those that are good for health and have new flavors.

Macfrut is one of the largest annual international trade fairs in Europe for professionals, with about 1,000 booths from over 90 countries, including more than 500 purchasing companies and around 32,500 visitors. The fair showcases agricultural products, fruits and vegetables, spices and herbs, poultry products, as well as modern machinery and technology related to all stages from cultivation and production to packaging, marketing and distribution. It also serves as a venue for business-to-business meetings, thematic conferences, and networking sessions.

Each year, Europe imports farm produce worth over 160 billion USD, and Vietnamese farm produce have become high-value export items that raked in 3.34 billion USD in 2022. In Italy, fruit is a strategic sector of the agricultural industry, with export earnings of 5.6 billion USD last year, ranking third in Europe and 10th in the world.

Four-month public capital disbursement reaches 14.66% of year's target

More than 110.6 trillion VND (4.7 billion USD) of public investment was disbursed in the first four months of this year, equivalent to 14.6% of the yearly target and lower than the 18.48% in the same period last year, according to the Ministry of Finance.

Only three ministries and 19 localities recorded a disbursement rate of over 20%; while 47 ministries and centrally-run agencies, and 27 localities had disbursement rates of less than 15%, it said.

To speed up the work, the ministry suggested the Prime Minister assign the Ministry of Planning and Investment (MPI) to issue specific guidance on conditions for allocating capital regarding medium-term and annual public investment.

Ministries, central agencies and localities were requested to submit reports on the progress of disbursement.

The MPI was asked to soon complete the dossier and report to the Government on the extension of implementation and payment of public investment capital from the 2022 State Budget to the following year for ministries, central agencies and localities.

State budget revenue reaches 645.4 trillion VND in four months

The total State budget revenue in the first four months of this year reached 645.4 trillion VND (over 27.52 billion USD), accounting for 39.8% of the estimate and 95% of the same period last year, the Ministry of Finance announced on May 5.

According to the ministry, although the revenue in the first four months of the year was quite good compared to the estimate, the monthly tended to decrease as the January collection reached 14.7% of the estimate, February 7.7%, March 8.9%, and April 8.6%.

Out of the 12 sources for domestic revenues, eight ensure collection progress with their State revenue topping 34% of the estimate, while the rest saw their revenue lower than the estimate

Out of the 63 provinces and centrally-run cities nationwide, 25 localities recorded state budget revenue topping 38% of this year’s targets.

Sixteen localities saw the collection higher than that in the same period of 2022, and 47 others were lower.

The Ministry of Finance also said that the state budget balance expenditure in the four months reached 500.3 trillion VND, equaling 24.1% of the estimate, up 6.1% over the same period in 2022.

It said expenditures in the four months were carried out as planned, meeting demand for socio-economic development, defense, security safeguarding, state management, debt repayment, and implementation of social security tasks.

Reducing loan interest rates an important policy to support businesses: central bank deputy governor

The State Bank of Vietnam (SBV) has been drastically implementing measures, particularly those to reduce loan interest rates, said its deputy governor Dao Minh Tu at a regular government press conference on May 5, calling it one of the important and practical policies to help businesses.

In the first four months of the year, the bank implemented eight policies to support businesses and since the beginning of the year, the SBV has reduced the regulatory interest rate twice, the official said.

Tu said that in general, credit institutions reduce deposit interest by 1-1.2%, and reduce the general lending interest rate of banks in the whole system by 0.5-0.65%. Particularly, state-owned commercial banks saw a more positive reduction with deposit interest rates being decreased by 1-1.5%, and lending rates by 1.5-2%. According to SBV’s statistics, for new deposits and newly made loans and credits, the average deposit rate is 6-6.1% and the average lending interest rate is 9-9.2%.

The figures show positive adjustments for interest rates, said Tu.

Responding to the public expectation of lowering interest rates in the coming time, the official said the bank will continue implementing flexible and reasonable monetary policies, ensuring the main objectives of controlling inflation and stabilising the value of the local currency and the harmonisation between the exchange and interest rates. Therefore, the SBV is continuing to instruct banks to cut interest rates, creating conditions for enterprises to borrow, and expand credit from now to the end of this year.

Major gap between domestic, international standards
 
The National Standardisation Strategy for 2030 has set a target of raising Vietnam’s harmonisation ratio with international, regional and foreign standards to at least 65% by 2025 and 75% by 2030.

As Vietnam is integrating into the global economy, and becomes a member of the World Trade Organisation (WTO), the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) forum, as well as new-generation free trade agreements, the country has to observe stringent regulations and requirements on technical standards in foreign markets.

In fact, Vietnamese goods draw warnings from foreign countries repeatedly due to their failure in satisfying technical standards and barriers set by importers.

The Vietnam Sanitary and Phytosanitary Notification Authority and Enquiry Point (SPS Vietnam) under the Ministry of Agriculture and Rural Development reported that last year it received nearly 1,000 notices relating to food safety and animal and plant quarantine. The complaints are up 10% year-on-year, mostly from Japan with 83 notices, followed by Brazil, the EU, Canada, and the US. 

To handle this issue, Vietnam must raise its standards harmonisation ratio toward international acceptance.

According to the Directorate for Standards, Metrology and Quality, Vietnam’s current national standards system, with over 13,500 standards in most economic sectors, has the harmonisation ratio of over 60% with regional and international standards.

Despite a remarkable number of national standards, Vietnam’s Global Quality Infrastructure Index scored only 54, behind many countries such as China, Japan, the Republic of Korea (RoK), India, Indonesia, Singapore, and Malaysia.

Currently, its national standards are built and managed by 13 ministries. However, the process has shown a lack of long-term orientations and consistency among them.

The SPS suggested Vietnam raise its harmonisation ratio with international standards to respond to trade barriers imposed by other member countries of the FTAs and reduce violations.

To meet the Government’s target by 2030, Vietnam needs to quickly build and issue the standardisation strategy, striving to become a member of the International Organization for Standardisation, and the International Electrotechnical Commission in 2025.

The country also needs to complete building a database for the national standardisation system and complete the digital infrastructure connected with ministries, agencies and localities.

Hanoi to host Vietnam International Logistics Exhibition 2023

The Vietnam International Logistics Exhibition (VILOG 2023) is set to take place on May 11 in Hanoi as a means of helping to promote the Vietnamese logistics service industry’s development and help it achieve its potential, whilst simultaneously calling for greater foreign investment in this field.      

Logistics represents one of the fastest growing and most stable industries in the country, with an annual average growth rate of 14% to 16%, raking in US$40 billion to US$42 billion per year.

According to the 2022 assessment made by Agility Logistics, one of the world’s top freight forwarding and contract logistics providers, the nation was ranked 11th in the group of 50 global emerging logistics markets.

VILOG 2023 gathers together the main groups of goods and services such as transport, forwarding; warehouse, factory services, and equipment; packaging and cold supply chain; and application of logistics technology.

According to details given by the Organizing Board, up to now, VILOG 2023 has received registrations from more than 150 businesses with over 200 booths from 16 countries and territories, including Belgium, Poland, Canada, China, the Republic of Korea, Japan, Germany, Malaysia, Russia, Singapore, Switzerland, Turkey, the United States, Hong Kong (China), Taiwan (China), and Vietnam.

Technology enterprises will use the event to introduce products and services at such as  AFR solutions, the leading cloud computing solution for logistics, supply chain, and trade management; along with AHAMOVE - OnWheel, a professional delivery management software.

Furthermore, at VILOG 2023, visitors will have the chance to have access to the latest logistics technology application, from the stage of goods management and circulation aimed at enhancing transportation capacity, to anticipate the increasing demand of the market and improve customer experience.

Reducing loan interest rates an important policy to support businesses  
 
The State Bank of Vietnam (SBV) has been drastically implementing measures, particularly those to reduce loan interest rates, said its deputy governor Dao Minh Tu at a regular government press conference on May 5, calling it one of the important and practical policies to help businesses.      

In the first four months of the year, the bank implemented eight policies to support businesses and since the beginning of the year, the SBV has reduced the regulatory interest rate twice, the official said.

Tu said that in general, credit institutions reduce deposit interest by 1-1.2%, and reduce the general lending interest rate of banks in the whole system by 0.5-0.65%. Particularly, state-owned commercial banks saw a more positive reduction with deposit interest rates being decreased by 1-1.5%, and lending rates by 1.5-2%. According to SBV’s statistics, for new deposits and newly made loans and credits, the average deposit rate is 6-6.1% and the average lending interest rate is 9-9.2%.

The figures show positive adjustments for interest rates, said Tu.

Responding to the public expectation of lowering interest rates in the coming time, the official said the bank will continue implementing flexible and reasonable monetary policies, ensuring the main objectives of controlling inflation and stabilising the value of the local currency and the harmonisation between the exchange and interest rates. Therefore, the SBV is continuing to instruct banks to cut interest rates, creating conditions for enterprises to borrow, and expand credit from now to the end of this year.

MOC's Inspectorate imposes fines for maintenance fee violations for condo developers

The Ministry of Construction’s Inspectorate has completed inspections for five localities and found several violations related to the management and use of maintenance fees for condominiums (2 per cent of value of the apartments).

A report on tienphong.vn showed the Inspectorate has imposed administrative sanctions against 12 out of 19 investors, with an amount of VND13.3 billion (US$564,000). The Inspectorate has also required investors to perform several tasks, including organising the first apartment building conference and handing over apartment building documents to the Management Board.

Furthermore, the Inspectorate has forced ten investors to open and deposit maintenance funds into their accounts, with a total of VND254.1 billion. The Inspectorate has also compelled six investors to finalise and hand over maintenance funds to the Management Board, totaling VND513.8 billion.

The Inspectorate has recommended reviewing 19 collectives and 14 individuals for violations and existence.

For example, the Alphanam Luxury project in Son Tra, Da Nang, did not fully pay the maintenance cost of the shared ownership of the apartment building, while also spending non-maintenance costs. However, the investor has since actively overcome the shortcomings and continued to pay maintenance costs.

The F-Home Apartment Building in Hai Chau, Da Nang, did not open a payment account to receive maintenance money and delayed transferring maintenance costs to the Management Board. The Summit Apartment and the Monarchy Apartment, two projects in Son Tra, Da Nang, violated maintenance fund requirements and slowed in opening of a deposit account for maintenance funds.

There were several violations related to maintenance fees in three different apartment projects in Hai Phong City and Ba Ria - Vung Tau Province, including failure in disclosing financial information about maintenance fees in purchase and sale contracts with customers and late in paying maintenance fees.

In recent times, there have been numerous disputes and lawsuits in condominiums, including those related to management and use of maintenance funds. Complaints regarding maintenance fees accounted for approximately 36 per cent of all disputes, ranking second in total number of disputes in condominiums.

Ha Noi announces seven new real estate projects for house trading

The Ha Noi Department of Construction has published a list of seven projects that meet the criteria for trading in real estate under the Real Estate Business Law.

Of the seven projects, one is a social housing project and the remaining six are commercial. They are located in various districts across Ha Noi, including Thuong Tin, Dong Da, Nam Tu Liem, Thanh Xuan and Long Bien.

In Thanh Xuan District, two projects are underway: the mixed-use Pandora complex in Trieu Khuc and the mixed-use housing project at 107 Nguyen Tuan Viha complex on Nguyen Tuan Street.

Nam Tu Liem District also has two projects: the construction of social housing on To Huu Street and the construction of apartments as part of the new urban area project Tay Mo-Dai Mo-Vinhomes Park.

Additionally, there is the Miracle Tower, a planned office and housing development in Dong Da District, a high-rise housing complex on plot CT7 in Long Bien District and a low-rise apartment project as part of the L.27 land use rights auction project in the Thuong Tin area.

Ha Noi targets to complete 21,100 housing units this year with a total accommodation area of 4.110,000sq.m and 400 social housing units with an area of 28,000sq.m.

The capital city will concentrate on diversifying housing types to meet the demands of the population with various income levels while encouraging the growth of satellite towns and districts between 2023 and 2030.

However, a recent report of Savills Vietnam has indicated that the apartment market in Ha Noi continues to be challenging in the first quarter, with a decrease in primary supply by 4 per cent quarter-on-quarter and year-on-year, reaching 19,483 units. The average primary selling price was VND52 million per square metre, up 22 per cent on-year.

Despite this, it is expected that the demand for housing will increase sharply in the future, with Ha Noi's urbanisation rate projected to reach 62 per cent by 2025 and 75 per cent by 2030.

In addition, the municipal construction department also published a list of projects that permit foreign individuals and organisations to own houses in the city, including high-rise housing C1-CT in An Lac Green Symphony in Hoai Duc District, Thu Do II Co Ltd's commercial and service buildings in Nam Tu Liem District and Lac Hong Investment Corp's high-class apartments in Bac Tu Liem District.

In total, there are eight such projects in Ha Noi to date, with sales capped at 30 per cent of the total number of residential apartments for each unit and block.

Housing supply expected to increase in the future with new credit package

The housing supply in the domestic market is expected to increase in the future thanks to a credit package of VND120 trillion for social housing development and a project on developing one million social houses, as well as other solutions removing existing obstacles.

This credit package is carried out by four State-owned commercial banks, Vietcombank, Agribank, BIDV and VietinBank, with annual interest rates from 8.2 to 8.7 per cent. This programme has been implemented since April 1, 2023.

This is also one of the important factors in promoting the development of social housing, meeting most people's needs.

Regarding this credit package, the State Bank of Viet Nam issued Document No 2308/NHNN-TD on April 1, 2023, guiding the lending interest rates, the application period of the preferential interest rates and the beneficiaries (customers).

Meanwhile, the Ministry of Construction issued Official Dispatch No 1551/BXD-QLN on April 20, 2023, guiding the determination of the list of projects, subjects, conditions and criteria for preferential loans for developing social housing and worker housing and renovating and rebuilding old apartments.

Phung Thi Binh, deputy general director of the Bank for Agriculture and Rural Development of Viet Nam (Agribank), said that the bank has so far provided loans under this credit package for two projects.

Le Ngoc Lam, general director of the Bank for Investment and Development of Vietnam (BIDV), said that BIDV is waiting for the Ministry of Construction to announce the list of eligible projects.

Nguyen Quoc Hung, general secretary of the Viet Nam Banking Association, said the banking industry has many solutions to implementing the credit package. Still, there are obstacles in ministries, sectors and localities.

The banks have agreed to reduce interest rates. Therefore, it is necessary to have solutions from ministries, sectors and localities to speed up the progress of lending, said Hung.

Finance expert Nguyen Tri Hieu said this support package is a short-term solution that the Government and the banks can immediately implement to support the property market.

This credit package will be absorbed quickly because of its small scale and being launched when the real estate market is very thirsty for capital. Loan procedures will be done in two weeks for eligible projects and customers. The loans can be disbursed in one month after the courses are approved.

The market's absorption capacity depends on the conditions of providing loans under the package and the efficiency in implementing this package, he said.

Primarily, it is necessary to have a monitoring mechanism so that capital flows to suitable projects and the right businesses to pay for the debt. That will avoid the situation that people who are not low-income or already have a house but still enjoy the support, Hieu said.

Besides that, many people need the loans from this package, but they cannot prove their income to qualify for loans if they do not have a bank account transaction, even though they have income and the ability to pay, he said.

Le Hoang Chau, chairman of HCM City Real Estate Association, has also added that it is necessary to consider the investment in social housing development for low-income workers as the priority in the investment of local medium and long-term capital.

In addition, it is necessary to supplement regulations on capital sources for housing development, such as mobilising capital from local development investment funds and foreign investment for social housing development.

Chau has suggested that the Government should continue to study and submit to the National Assembly for approval on a credit package worth around VND110 trillion ($4.6 billion) in the form of financing for commercial banks to refinance social housing projects and housing projects for workers with a preferential interest rate of about 4.8-5 per cent each year for a maximum period of 25 years. The VND110 million package is similar to the VND30 trillion package in 2013-16.

Nguyen Quoc Khanh, chairman of DTJ Investment and Distribution Joint Stock Company, said that capital is a necessary factor at this time, but it is still not enough. Besides capital, the investors of social housing projects always want the project investment procedures and disbursement procedures to be resolved quickly.

To effectively disburse this credit package, overcoming the bottlenecks in current social housing development is still necessary. Specifically, it is to establish a land fund for social housing development as soon as possible and reduce procedures in receiving approval for the projects and trading social housing products, Khanh said.

The Government has approved a project to build one million social housing units from now to 2030. So now, localities have more than 300 social housing projects with about 400,000 apartments.

Viet Nam expects to have a total of 1,062,200 social housing apartments by 2030, including about 428,000 apartments in the period of 2021-2025 and about 634,200 apartments in the period of 2025-2030.

This project targets to develop social housing, housing for workers with affordable prices for middle- and low-income households in urban areas and workers in industrial parks and export processing zones.

Deputy Minister of Construction Nguyen Van Sinh affirmed that besides the VND120 trillion credit package, the Government had introduced a series of solutions to amend the institution, create a land fund, and support taxes and land use fees for communal housing projects.

Those solutions are efficient according to the market demand at present; the problem is how to implement those by stakeholders efficiently, Sinh said.

He believes that in the future, besides many existing projects that will overcome the difficulties, the project of one million social housing units will make the housing supply on the market more abundant, contributing to bringing house prices back to a more suitable level with people's income. 

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes