The Government is weighing a plan to establish three funds for housing development in a move to support the property market development and to build more houses for low-income earners in the country.
Deputy Prime Minister Hoang Trung Hai last week asked the Central Steering Committee for Housing Policy and Real Estate Market to draft a plan of establishing the three funds comprised of a housing development fund, a housing saving fund and a property investment fund.
The Government’s website reports the move as a breakthrough in stabilizing the local housing development market once those funds are translated into reality.
Nguyen Tran Nam, Deputy Minister of Construction, said most property projects had been developed with funds coming from three main sources, including the developers’ equities, loans from banks and funds mobilized from customers.
The three sources, according to Nam, are still inadequate and many cash-strapped developers find themselves financially incapable when the market goes down. Therefore, the draft plan for housing development with the three funds would help them overcome this situation.
In fact, the housing development fund is provided for in the Housing Law, but such a fund has not been launched in the country except for HCMC where such a fund has been established mobilizing some VND1,000 billion.
Income for the fund, besides allocations from provincial State budgets, will also come from rents of state-own properties and partly from land use fees.
Meanwhile, the housing saving fund is expected to be established as a non-profit credit institution which will directly be managed by a government agency. The fund will offer homebuyers with loans or support developers who build budget housing projects for the poor and policy people.
The fund will receive capital from land resources, the state budget and other economic organizations.
Meanwhile, the property investment fund will operate in accordance with the Securities Law, allowing investors to buy fund certificates instead of directly buying a certain property. The fund manager will represent investors to purchase and sell and manage the property.
The property investment fund will attract many investors because it calls for capital through the stock exchange.
The deputy prime minister urged the central steering committee to quickly finish the draft and map out a mechanism to facilitate the establishment of such funds in a move to stabilize the local property market in the coming time.