Govt’s credit package funding house purchases inaccessible to people

VietNamNet Bridge – Both the State and commercial banks have announced the launching of credit packages at preferential interest rates to fund house purchases. However, the packages still have not reached out to people.

People have been in high spirits after hearing the news that a government’s credit package would allow them to borrow money at the preferential interest rates of 7-8 percent per annum to buy houses.

However, a banker said the credit package remains on… paper, while in the immediate time, house buyers still bear the high interest rates of 15-19 percent per annum.

NTT Linh in district 9 of HCM City has confirmed that banks still set sky high interest rates for house buyers, because they say they still have not got any capital support from the State yet.

Linh, after hearing that the price of a two bedroom flat has decreased to 700 million dong, came to a bank to ask for a loan worth 70 percent of the apartment’s value.

However, she has given up the plan to buy the apartment, after the bank officer told her that she would have to pay 19 percent per annum. With the sky high interest rates, she has to pay nearly 10 million dong a month in bank loan interests, which is nearly equal to the total income of her family.

A series of preferential credit packages launched

Big commercial banks have announced the big credit packages worth trillions of dong to fund house purchases.

Eximbank has reserved 5 trillion dong to lend to the individuals who buy new houses or upgrade the existing houses at the interest rate of 12 percent per annum. Especially, clients can borrow the sums of money equal to 70 percent of the mortgaged asset values for a long period of 15 years.

BIDV has announced the 4 trillion dong credit program which would be disbursed to the individuals who need to buy house at the interest rate of 12 percent per annum (for the first six months). Vietcombank has the 2 trillion dong credit program, while Vietinbank is running a credit program worth 5 trillion dong.

Governor of the State Bank of Vietnam Nguyen Van Binh promised at the meeting between the Prime Minister and HCM City People’s Committee that the State Bank would provide 40 trillion dong in the second and third quarters of 2013 at the reasonable interest rates of 8 percent to fund house purchases.

The dream still far away

The director of a HCM City-based commercial bank said despite the efforts by commercial banks to push up disbursement, the bank loan interest rates are still too high if compared with the people’s incomes, which explains why the credit programs remain inaccessible to people.

An office worker, if borrowing 100 million dong to repair his house, would have to pay the bank loan interest of 20 million dong. Besides, he also has to pay principal periodically.

The government has stated that it would give financial support, so that house buyers can borrow money at the interest rates of 7-8 percent per annum. However, this remains an idea, and it’s still unclear when the policy would be brought into life.

Meanwhile, no one can say for sure that banks would lend at preferential interest rates. Nguyen Xuan Quang, President of Nam Long Investment Company said the preferential interest rates of 8-9 percent are applied for the first months only. Meanwhile, in general, people borrow for 10-15 years, and they don’t know how the interest rates would be like in the future.

Manh Ha

Vietnam, real estate market, prices, frozen, policies