City leaders discuss solutions for stagnant property market

Ho Chi Minh City People’s Committee Chairman Le Hoang Quan on June 17 met with authorized agencies to debate solutions for the slow disbursement of the VND30 trillion credit package for social housing.

Garden Hung Ngan housing gproject in District 12, HCMC (Photo: SGGP)

The State Bank of Vietnam’s HCMC branch has pledged to loan 800 customers including 799 individuals and one business with VND989.03 billion. Of which, VND540 billion is for the business, said the branch deputy director Nguyen Hoang Minh.

VND447.98 billion has been disbursed to 510 customers. Nearly 56 percent of the amount is to the business.

These numbers are too low compared to capital demand of house buyers and project investors, he said.

Some involved regulations have been changed to facilitate borrowing, Minh said. For instance interest rate is lowered to 5 percent from 6 percent and lending time is extended from 10 years to 15 years.

The State Bank and the Ministry of Construction have forwarded other proposals to the Government to speed up the credit package disbursement.

Beside social houses, the package should cover commercial houses with area smaller than 70 square meters and each square meter is priced under VND15 million. Commercial projects worth less than VND1.5 billion each should also be loaned.

The HCMC Real Estate Association suggested authorized agencies to make loan related forms more straightforward.

Reasons for the slow disbursement should be defined to have better solutions, said HCMC Deputy Chairman Nguyen Huu Tin.

Nguyen Van Danh, deputy head of the HCMC Construction Department, said that HCMC had 14,490 inventory apartments in 2012, which 6,970 equivalent to 48 percent have been sold.

Forty one percent of 1,893 apartments that were sold in the first half this year were purchased after investors divided unsold apartments into smaller ones.

Most inventory apartments are larger than 70 square meters or from behind-schedule projects.

Investors have suggested converting 11 commercial housing projects into social housing ones but only seven have been approved. They have also proposed to divide apartments of 21 commercial projects into smaller parts.

Deputy Chairman Tin said that the city is willing to pass businesses’ proposals. However, their projects must meet norms on environment, planning and infrastructures.

Chairman Quan instructed authorized agencies to thoroughly reconsider licensed housing projects to better measures to solve difficulties in the property market.

The Department of Construction should study and improve the housing project for low income group as well as social housing project and submit the city leaders for approval.

By Do Tra Giang – Translated by Hai Mien

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