Recently, the Vietnam Bank for Social Policies (VBSP), which is one of the country’s two policy banks, has set a maximum interest rate of 4.8% for those who borrow money to buy affordable homes in accordance with a recent decision by the government.
This year, VBSP plans to offer VND1.3 trillion ($56.5 million) worth of incentive loans to low-income home buyers, an increase 30% from last year’s outstanding loans.
A social housing project in Gia Lam District, Hanoi.
Until 2020, demand for affordable housing is predicted to soar. The Vietnamese Government has searched for private capital for this segment, according to reports released at a recent conference.
Deputy Minister of Construction Nguyen Van Sinh said at least 1.7 million people and another 1.7 million workers are in need of housing by 2020, adding that Vietnam needs to build at least 12.5 million sqm of accommodation for low-income people in urban areas. But the figure could meet only 80% of the total demand.
The Government has offered various investment and tax incentives namely lend tenure fees and reduction or exemption of corporate income tax and VAT in order to attract more investment into affordable housing segment.
People who are able to access social housing program are state cadres, including low-ranking armed forces officers who are in need of housing, and low-income earners who meet additional requirements of the authorities.
The price of social housing is maximum VND15 million (US$646)/square meter. Beneficiaries include those owning no domiciles or dilapidated houses, some soldiers and policemen in the payroll of the armed forces, some civil servants, and low-income people.
