Construction ministry scraps $4.6B social housing credit package

By Hoai Thu, Phuong Anh   March 2, 2023 | 10:00 pm PT
Construction ministry scraps $4.6B social housing credit package
People walk by a social housing building in Binh Tan District, Ho Chi Minh City. Photo by VnExpress/Quynh Tran
The Ministry of Construction has pulled the plug on a VND110 trillion ($4.64 billion) credit package for developing social housing just two weeks after announcing it.

Raising the money could run into difficulties in sourcing the money, deputy head of the ministry’s home and property market department, Ha Quang Hung, told VnExpress Thursday.

It would instead collaborate with the State Bank of Vietnam (SBV) on the VND120 trillion package the latter has planned, he added.

The ministry came up with the VND110-trillion credit plan on Feb. 14 for funding construction of social and workers’ housing to boost supply in the affordable segment and rescue the property sector from its current slump.

It was planned along similar lines as a VND30-trillion package in 2012-16, which enabled 53,000 borrowers to buy or repair homes with loans at low interest rates.

The ministry has recently proposed a reduction in the number of social housing units to be built by 2030 from 1.4 million to one million due to a shortage of resources.

The central bank has directed the four state-owned lenders to provide VND120 trillion to property developers and home buyers at interest rates that are 1.5-2% points lower than the market average.

The four banks are now discussing the best way to execute it since many housing projects have been stalled due to administrative issues, Do Minh Tu, deputy governor of the SBV, said.

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