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PM tasks construction ministry with researching G-bond issuance to support social housing construction
Prime Minister Phạm Minh Chính has assigned the Ministry of Construction to conduct research and propose plans for issuing government bonds to support interest rates for investment activities and the construction of social housing.
A social housing project in Việt Hưng Urban Area, Long Biên District, Hà Nội. The Government has initiated a project to build one million social housing apartments for low-income individuals and workers by 2030. — Photo tinnhanhchungkhoan.vn
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This directive was conveyed in an official communication from the Government Office to the Ministry of Construction, addressing the Prime Minister's concerns regarding the development of social housing.
The Government has initiated a project to build one million social housing apartments for low-income individuals and workers in industrial parks by 2030. Over the past three years, nearly 500 social housing projects have been carried out nationwide, providing 411,250 apartments. However, less than 10 per cent of these units have been completed, with the remainder either starting construction or awaiting approval. Many businesses face challenges due to the complex procedures required for social housing projects compared to those for commercial housing.
In light of these issues, the Prime Minister has requested the Ministry of Construction and related agencies to explore plans for issuing government bonds to support the development of the social housing sector. The Ministry is also tasked with researching additional solutions for interest rate support, investment, and social housing construction.
Government bonds are commonly used as a financial instrument for capital mobilisation by the government from investors. This marks the first time that the government has mentioned this option for social housing development.
In the draft Decree on social housing development and management, which was open for consultation by the Ministry of Construction in late February, the ministry proposed a plan to issue government bonds for the development of this sector. The aim is to secure resources for preferential loans for social housing development through the Bank for Social Policies.
According to a report by the Ministry of Construction, social housing development varies across different localities. For example, in Hà Nội and HCM City, the number of apartments only meets less than 20 per cent of the demand. Several localities, such as Vĩnh Phúc, Ninh Bình, Nam Định, and Quảng Ngãi, have not initiated any projects in the past three years.
Experts have recommended that the government prioritise allocating budget and resources to promote the development of the social housing segment. Currently, the Ministries of Planning and Investment, Finance, and the State Bank are tasked with reviewing and reporting to the Prime Minister plans to supplement budget funds for lending to this sector through the Bank for Social Policies until 2025.
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