Vietnam mulls funds to finance more housing projects

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The Vietnamese government is considering a construction ministry proposal to set up three real estate funds in an effort to increase capital for the property market.

 

At a meeting on Friday, Deputy Prime Minister Hoang Trung Hai ordered the Central Steering Committee to promptly finalize the Housing Development Strategy draft submitted by the construction ministry.

 

Hai does not want to delay the country mobilizing capital through different channels to finance more property projects, especially low-income housing.

 

In the draft, the Ministry of Construction suggests the establishment of a housing development fund, a housing savings fund and a Real Estate Investment Trust (REIT).

 

Deputy Minister Nguyen Tran Nam said the current property market mainly relies on real estate firms' capital, bank loans, and funds mobilized from homebuyers.

 

But Nam said the three channels were not enough, and thus, the proposed funds would help.

 

According to the proposal, the housing development fund will be set up by each province and its capital comes from the sale or lease of state-owned buildings in that province.

 

As for the housing savings fund, the government will supply capital to it at the beginning and then people wanting to buy homes in the future will contribute to it. Low-income housing developers will be eligible to assess soft loans at the fund.

 

The REIT will raise capital from the public by issuing fund certificates on stock exchanges. The fund will not only help construct and trade buildings but also provide property loans.

 

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