The Ministry of Construction has said solutions should be found to boost the development of affordable housing projects after the VND30trn (USD1.3bn) low-interest home loan package ends.
Vietnam invests in social housing
The ministry's report claimed the policy to promote social housing in the first eight months of this year had been a success.
81,500 households who contributed to the country have been supported and the authorities are preparing to give support to other 10,500 households. 88 projects for students have been opened and the last seven projects are being sped up to completion. Over 28,000 apartments for workers worth VND6.8trn had been built. 58 projects worth over VND10trn for low-income people have been or are being built.
Projects for workers in industrial zones and low-income people in the cities have the most demand for housing, but the success of these projects depends greatly on location and the level of investment.
The low-interest home loan package worth VND30trn which was launched in June 2013, ended disbursement on June 1. However, the State Bank of Vietnam has asked banks to extend the package to improve the real estate market.
Nguyen Tran Nam, chairman of Vietnam Real Estate Association said after the package's disbursement was stopped, demand suddenly dropped and caused them difficulties in terms of capital, urban planning and infrastructure. Several projects experienced difficulties despite initial progress.
According to real estate companies such as Savills and CBRE, the affordable housing sector in Vietnam has seen healthy growth with increasing demand and low bad debts. Demand in Hanoi is especially acute and hasn't been met. There also remains a lack of affordable housing in various industrial zones in Haiphong, Bac Ninh, Vinh Phuc, Dong Nai provinces.
Many companies want to invest in the sector due to helpful government policies and huge demand. However, the lack of completed infrastructure, as most of the projects would be located far from urban centres is causing headaches. In addition, even though local authorities have given approval to many projects, only those approved by central agencies can enjoy low-interest loan package and many find it difficult to navigate the procedures.