The Ho Chi Minh City Real Estate Association has asked the State Bank of Viet Nam to provide a $1.3 billion USD stimulus package for preferential home loans. According to the association, the funds will allow consumers to purchase apartments that average $45,000 ~ $50,000 USD (1 billion VND).
Previously the government has launched a housing stimulus package in 2013 with loan value of $1.2 billion USD (30 trillion VND) but since that program ended in 2016, no other housing stimulus packages have been developed.
The association also requested that other funds that have been allocated to support social housing projects that are held by the Viet Nam Bank for Social Policies be released and transferred to four credit institutions – Agribank, BIDV, Vietcombank and Vietinbank so that they can provide social housing loans to eligible consumers.
In addition, the real estate association said that state budget should spend allocate $45 ~ $90 million USD (1 ~ 2 trillion VND) annually from 2018 to 2020 to provide loans for affordable home purchases at the preferential interest rate of 4.8% per year.
The association also proposed mechanisms to be put in place to ensure the preferential lending package are used for the right purposes and requested that preferential credit should also be provided to social housing developers so that they can offer homes at lower prices.
The governments original housing stimulus loan program in 2013 that was valued at $1.3 billion USD (30 trillion VND) and was launched at a time when the real estate industry had bad debt and high inventories after Vietnam’s 2008 and 2009 growth had frozen and stalled. That package allocated 70% of funds to provide loans at preferential interest rates and helped more than 56,000 low-income families to purchase their homes and has been considered a resounding success.
Economic experts note that as long as the new loan programs will also stipulate that 70% or more of the loans be used for purchases by low-income families then the program will not only provide a continued 5+ year stimulus for the housing market but will help 250,000 families to own their homes and will help stimulate the domestic market in a myriad of ways.