Many incentives for social housing development, supply still 'slow'

(CLO) In the coming time, social housing investors will enjoy more preferential regulations such as regulations on determining and calculating the purchase and sale prices of social housing. All changes and additions to the legal framework for social housing will increase the supply of real estate and the structure of social housing.

Mechanisms and policies are ready

At a recent workshop, Mr. Vuong Duy Dung, Deputy Director of the Department of Housing and Real Estate Market Management, Ministry of Construction emphasized: The Land Law 2024, the Real Estate Business Law 2023 and the Housing Law 2023 will take effect from August 1 with many amended regulations, which when put into practice will remove many difficulties in developing the real estate market.

Mechanisms, policies and support solutions are ready to improve the supply of social housing. (Photo: ST)

In the coming time, social housing investors will enjoy more preferential regulations such as regulations on determining and calculating the purchase and sale prices of social housing. All changes and additions to the legal framework for social housing will increase the supply of real estate and the structure of social housing.

Mr. Dung commented that when the social housing policy mechanism is cleared, it will increase the supply of products to meet people's needs. The increased supply will affect housing prices in the coming time.

Meanwhile, at the Dialogue Conference on the effective application of the Housing Law 2023 recently organized by the Vietnam Real Estate Association, Ms. Pham Thi Thu Ha, Deputy Head of the Social Housing Department, Department of Housing and Real Estate Market Management, Ministry of Construction said: The Housing Law 2023 has devoted a whole chapter to regulating social housing.

Previously, many social housing development enterprises reported that the procedures for requesting investment and construction policies for this housing segment were very complicated and cumbersome, with even more “sub-regulations” than those for normal commercial housing investment projects. Prolonged requests for investment and construction policies could create financial pressure for enterprises.

Ms. Pham Thi Thu Ha said that the current law and the procedures for developing social housing under the new law have shortened many administrative procedures, including 3 steps.

In the project preparation stage, the planning step has differences in which the planning requirement when bidding for the project is to have a 1/2000 zoning plan or a detailed 1/500 scale plan.

In particular, investors are exempted from land use fees and land rent for the entire project; do not have to carry out procedures for determining land prices, calculating land use fees and land rent, as well as procedures for requesting exemption.

In addition, in case the investor builds within the scope of a social housing project, the determination of land price and calculation of land use fees payable shall comply with the provisions of the law on land.

“The two steps in the project implementation phase and the project completion phase are not much different from commercial housing projects,” Ms. Ha emphasized.

Preferential capital is also available

To increase the supply of social housing, the Housing Law 2023 also clearly stipulates incentives for investors. In addition to not having to carry out procedures for determining land prices, calculating land use fees, land rents as well as procedures for requesting exemptions, investors are entitled to a maximum of 10% of the total construction investment cost for the area of social housing construction.

In addition, the Government has been and continues to implement a credit package of 120,000 billion VND for social housing development. This package is implemented in the spirit of banks proactively balancing, the budget does not support, so short-term loan interest incentives are given, 3 years for investors, 5 years for buyers.

Overview of the regular press conference for the third quarter. (Photo: ST)

At the regular press conference for the third quarter held yesterday (October 17), Mr. Vuong Duy Dung, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) shared: In reality, the VND120,000 billion package does not ensure enough incentives for home buyers who are low-income people and industrial park workers.

Therefore, to increase incentives, the Government is assigning the Ministry of Construction to study a VND30,000 billion loan package for social housing purchases, including VND15,000 billion in government bonds and VND15,000 billion from local budgets to support low-income people and workers to buy social housing. Thereby, helping low-income people to access cheap capital to buy houses.

According to Mr. Dung, the 30,000 billion VND credit package must be implemented in accordance with other laws, so the Ministry of Construction is working with the Ministry of Finance and the State Bank to soon implement this credit package.

Sharing this view, Deputy Minister of Construction Nguyen Viet Hung further emphasized: "The core of the social housing development policy is exemption of land use fees and preferential credit. Preferential credit not only supports investors in building houses but also helps low-income people access cheap loans to buy houses."

According to the report of the Ministry of Construction, after more than a year of implementation, the 120,000 billion VND credit package has only disbursed nearly 1%, or about 1,344 billion VND. Of this, 1,295 billion VND is for investors in 12 projects and the rest is for home buyers.

The capital source for the 120,000 billion VND credit package comes from 4 state-owned commercial banks (BIDV, VietinBank, Vietcombank and Agribank). Currently, 4 more private banks, TPBank, VPBank, MBBank and Techcombank, have registered to participate in the program with each bank registering 5,000 billion VND (increasing the interest rate support capital source to 140,000 billion VND).

Explaining the delay in disbursing the VND120,000 billion package, Mr. Vuong Duy Dung said that this package has a rather short incentive period for both buyers and investors, so it is not attractive.

In addition to the two capital support packages mentioned above, in reality, there is also a new point, which is the capital entrusted from the local housing development fund (if any), annual local budget support, capital from bond issuance, housing bonds and other legal sources decided by the People's Councils at the provincial and district levels to implement the social housing goals and plans in the locality.

It is noteworthy that credit institutions designated by the State will provide loans for social housing according to regulations decided by the Government and the Prime Minister in each period...

Supply is still "slow"

Although there are many policies supporting the development of social housing, the supply of this segment is still limited.

According to a report by the Ministry of Construction, from 2021 to August 2024, the country has launched 619 social housing projects, equivalent to providing more than 560,000 apartments to the market. However, the progress is still slow, with only 79 projects completed with 40,600 apartments; 128 projects are under construction and 412 other projects have been approved for investment.

Notably, some localities with high demand for social housing such as Thai Nguyen, Ninh Binh, Nam Dinh, etc. have not yet completed any projects, making it difficult for low-income people to access housing. Thus, by the end of August, the number of social housing units that have started and completed has only reached about 35.6% of the target by 2025 of the Project to build 1 million social housing units.

With the current progress, the Government's target of completing 130,000 units by 2024 to address the urgent housing needs of the people is becoming a difficult "problem".

To promote investment in social housing, the Research Group of the National Economics University (NEU) recommends that the State should have reasonable compensation and site clearance plans for households in the area to build social housing to facilitate and speed up site clearance.

This unit also requested the Ministry of Construction to coordinate with other ministries and branches to organize the implementation of direction, urge and guide localities to actively implement the government's resolution.

At the same time, review, monitor, detect and strictly handle violations in implementation, ensure re-planning and land arrangement in localities to develop social housing areas according to the law and State's instructions, ensure strict implementation of the land ratio for social housing, housing for industrial park workers in housing projects, urban areas...

Source: https://www.congluan.vn/nhieu-uu-dai-cho-phat-trien-nha-o-xa-hoi-nguon-cung-van-dung-dinh-post317419.html