Nguyễn Trần Nam, chairman of the Việt Nam Real Estate Association, spoke to Thời báo Kinh tế Việt Nam (Việt Nam Economic Times) about the need for continued Government support of housing projects for low income people.

How do you respond to the Ministry of Planning and Investment’s announcing that the Government doesn’t have the funds to support the affordable housing program and the Ministry of Finance’s proposal to adjust the lending rate of that housing program?

Under the 2014 Housing Law, affordable housing or social housing schemes are to be funded by the national budget through the Việt Nam Bank for Social Policies (VBSP), and lending institutions are to provide a long-term preferential interest rate to the beneficiaries. That’s why, in my opinion, the Ministry of Finance (MOF) proposal runs against the 2014 Housing Law.

The Ministry of Planning and Investment (MPI) says it has no solid foundation for requesting the Government to arrange a medium-term loan for the social housing scheme in the period of 2016-2020. What’s the point of view of the Việt Nam Real Estate Association (VNREA)?

I’m sorry to say, we don’t agree with the argument raised by the MPI. The social housing scheme has been approved by the Party and State. In the last cabinet meeting in June, the Government assigned the MPI to act as the focal point for funding of social housing schemes with support from the MOF and other ministries and institutions.

According to the Public Investment Law and Decree 100, the State Bank of Việt Nam and the VBSP are the two institutions charged with developing the medium and annual-term loans for the social housing scheme. These two institutions are also authorised to do the appraisal and approval of the loans.

The scheme is a correct and major policy of the Party and State. Now it is time for executing agencies to turn it into reality for legitimate benefits of low income earners.

How do you respond to the MPI’s proposal to mobilise capital resources from the private sector in carrying out the social housing scheme?

I don’t think the proposal is workable due to the high interest rate and the short-term loans. And we all know, the scheme’s beneficiaries are poor or near poor households and low income earners.

So far, only 145 social housing projects have been completed, with 58,500 apartments, while 174 projects with 139,300 apartments are under construction.

For the 58,500 finished apartments, most of the beneficiaries have completed the documents required to borrow money from the social housing scheme. However, the other 139,300 apartments have not yet been granted access to the special loans promised by the Government.

If the loans do not come on time, beneficiaries of the social housing project will be delayed in moving into better housing as promised by the Government. Along with that, the problem of real estate stagnation will have a chance to rear its head again.

In my opinion, the ball is now in the court of the MPI, the MOF and concerned agencies. To my understanding, there is a rumor that quite a few real estate developers are now focusing on high-end real estate development instead of low-end real estate. If it is true, the Government should adopt policies to speed up the process of constructing more houses for low-income earners. This is an effective tool for adjusting the real estate market to balance the needs of the haves and have nots and to help the market develop sustainably.­— VNS