HA NOI (VNS)— The State Bank of Viet Nam (SBV) said that it was reasonable to offer a preferential interest rate of 6 per cent for three years to low-income house renters and buyers.
It added that this would not increase the credit limit, which currently totals VND30 trillion (US$1.428 billion).
The support package would only be provided to low-income earners, State staffs and armed forces with hire or hire-purchase contracts of social houses or apartments smaller than 70sq.m and priced below VND15 million ($715) per square metre.
People who bought social houses would not be eligible for the support.
SBV defined low-income earners as people whose average monthly income was not subject to personal income tax.
Only investors of social projects and projects converted to social purposes according to the Ministry of Construction would get the preferential loans.
The construction ministry is currently working on a circular that includes detailed regulations on who can receive the support package.
The central bank said it would not be feasible to divide the fund into two parts with rates of 65 per cent and 35 per cent as mentioned in several proposals, due to the continuous fluctuations of outstanding loans in the banks.
SBV said the VND30 trillion package was reasonable with regards to preserving macro-economic stability and curbing inflation in both the short-term and medium-term.
Apartments in the CT11 building in Kim Van-Kim Lu Urban Area, located near Belt Road 3, were released for sale last week.
Their prices range from VND10 million ($477) to VND14.5 ($690.5) per square metre depending on size. Their areas vary from 45.5 to 77.6 square metres.
Two days later, they were completely sold out, according to an official from the Muong Thanh Real Estate Trading Floor.
The sale's popularity indicates how many people long to own a house in the big city but are limited by monetary constraints.
Nguyen Chi Kien, deputy director of Him Lam Thu Do Company, said that investors are now responding to this demand by focusing on apartments with prices below VND15 million ($715) per square metre, according to Cong An Nhan Dan (People's Police) newspaper.
Buyers with a budget below VND1 billion are generally forced to look at apartments farther from the city's centre.
But there's such a thing as prices being too low. One woman said in an online forum that the prices were so low that she worried about the quality of the building.
According to Pham Sy Liem, vice chairman of the Viet Nam Federation of Civil Engineering Associations, prospective home buyers should read up on projects and investors carefully and even consult lawyers before making a purchase.
Do Ngoc Mai, who now rents a house in Cau Giay District, said the prices of the apartments were reasonable, but she still hesitated because she did not know much about the project or the investor.
The CT11 project was carried out by Lai Chau Construction Company No1.
According to information on the website of Muong Thanh Real Estate Trading Floor, the building was designed with 40 floors and 18 apartments on each floor. The project commenced on January 11 and is scheduled to be completed by 2016. — VNS