Deputy Prime Minister Tran Hong Ha at the May 24 meeting. Photo: VGP

"The distribution of the $5 billion package has no intention to shore up the real estate market, but rather towards achieving the goal of establishing at least one million social housing apartments by 2030," said Deputy Prime Minister Tran Hong Ha at a May 24 meeting on the status of this credit package.

He said the majority of problems are related to the procedures and processes of social housing programmes, worker housing, and the conditions for purchasing this sort of residence.

The Law on Housing is being amended and complemented, and the Law on Land has been submitted to the National Assembly. After the aforementioned laws take effect, these issues will be thoroughly resolved, he said.

He added that he had requested that the State Bank of Vietnam (SBV) and the Ministry of Construction (MoC) to proceed with investigations and recommend suitable measures and duration of interest-rate assistance for investors and homebuyers eligible for loans from the package.

In April 2023, the MoC and SBV streamlined procedures and accelerated the application evaluation process to ensure that firms could access loans sooner.

The $5 billion credit programme is an incentive loan package for investors and purchasers of social housing projects and worker housing, with interest rates between 1.5 and 2 percentage points below-market rates. Since its implementation on April 1, nobody has borrowed money for almost two months.

Chairman of the Government Office Tran Van Son, analysing why the credit package was unable to be disbursed, said that the demand for social housing was exceptionally high, but the execution handle still has many issues in terms of land availability and a lack of social housing planning in the region. Consequently, certain companies were awaiting the implementation of the amended Law on Housing, which includes more transparent processes and procedures.

Faced with this issue, the deputy prime minister instructed localities to expedite the organising and preparation of land funds for the erection of social houses and workers' houses in appropriate, practical, and large-scale positions with complete technical infrastructure, particularly in major cities such as Hanoi, Ho Chi Minh City, Haiphong, Danang, and Can Tho.

The report from the MoC indicates that there are presently approximately 100 licensed social housing and migrant housing projects in 36 municipalities. Approximately $3 billion was invested in more than 85,660 units from these developments.

Localities with seven-flat renovation and construction projects have a loan demand of approximately $176 million. In addition, Bac Giang province announced twelve loan-eligible initiatives. Other provinces, such as Binh Duong and Dong Nai, are implementing worker housing and social housing initiatives.

In Hanoi alone, there are presently more than 4,000 social housing apartments for sale and approximately 40 projects in development.