Prime minister calls for more affordable housing

By Anh Minh   March 28, 2023 | 06:38 am PT
Prime minister calls for more affordable housing
Apartment blocks and office buildings along Hanoi Highway and Metro line No. 1 in Ho Chi Minh City in February 2023. Photo by VnExpress/Quynh Tran
Prime Minister Pham Minh Chinh issued statements Monday urging property developers to combat the housing shortage by building more affordable homes that “meet the needs of more people.”

Property developers should focus on social housing and workers’ housing instead of high-end properties, according to the Prime Minister, who added that "real estate companies should restructure their products and market segments to lower housing and land prices."

PM Chinh asked ministries to clear away legal obstacles facing property projects, especially those that issue corporate bonds, use bank loans, or mobilize capital from home buyers.

He urged the State Bank of Vietnam to quickly implement an approved credit package of VND120 trillion (US$5.1 billion) for the development of social housing and housing projects for workers, and the renovation of old apartment blocks.

Under the package, loan interest rates for buyers or developers of social housing projects and worker housing projects will be 1.5-2% lower than average bank lending rates. The central bank has also been tasked with lowering interest rates at commercial banks.

The increasing costs of land, materials, labor, legal procedures, and interest rates, as well as speculation, have all been pushing housing prices up for years, according to experts.

In recent market reports, the Ministry of Construction has confirmed that housing prices are currently unaffordable for many people.

The real estate market, which contributes some 11% to Vietnam’s GDP, is dormant mainly because of credit and corporate bond tightening, high lending interest rates, and legal bottlenecks regarding property development and ownership.

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