The program was initiated by the central bank following reports from different ministries and branches that Vietnam is seriously lacking social housing products and housing for factory workers. The program aims to build at least 1 million social housing apartments for low-income earners and Industrial Zone workers in 2021-2030.

However, to date, no disbursement of the credit package has been reported as confirmed by Nguyen Xuan Bac, deputy director of the Credit Department under SBV at a conference on implementing the program held by the Ministry of Construction (MOC) on May 19.

Bac said to date, SBV has not received the list of projects as per the MOC’s instructions shown in Dispatch No1551. Though the program began on April 1, no outstanding loan of the credit package has accrued.

According to Bac, there still exist problems related to the choosing of investors, land banks and preferences specifically reserved for social housing developers, and the determination of selling prices of social housing products. This may affect the supply of social housing and project implementation. 

Besides, the regulations on the conditions eligible for buying social housing products, including conditions on residences and incomes, are believed to be unreasonable, especially amid increasingly high real estate prices.

“These problems are the major reasons affecting the capability of absorbing the VND120 trillion credit package,” Bac said.

Bac believes that it is necessary to amend relevant legal documents to remove problems in legality and investment procedures to increase supply in the market segment and satisfy the demand from people.

He called on local authorities to soon make public the lists of projects so that beneficiaries can access loans at commercial banks.

According to Deputy Minister of Construction Nguyen Van Sinh, by May 18, 41 social housing projects in urban areas with about 19,500 products had been completed. Meanwhile, other 294 projects are underway with 288,500 products. This includes 93 projects for factory workers and 201 projects for low-income earners in urban areas with 161,227 apartments.

Minister of Construction Nguyen Thanh Nghi said that by 2030, Vietnam plans to complete the construction of 1,062,200 social housing apartments, of which 428,000 apartments would be completed in 2021-2025, and 634,200 apartments in 2025-2030.

Hong Khanh