Have you touched your dream home?!

Currently, in big cities like Hanoi and Ho Chi Minh City, house and land prices are very high.

The most important point when discussing the effectiveness of lowering interest rates is the gap between housing prices and people's incomes. Currently, in big cities like Hanoi and Ho Chi Minh City, housing prices are very high. At this price, even if the lending interest rate is lowered to 5%/year, many families still cannot afford to pay off their home loans. Imagine a typical family with an average income of about 25-30 million VND/month, facing a loan of 2 billion VND over 20 years. Even with an interest rate of 5%/year, they still have to pay about 13 million VND/month in principal and interest. This figure accounts for a large part of the family's total income, not to mention other living expenses, which makes many people hesitate to take out a home loan, even with interest support.

A report from VCBS Securities Company also shows that in the first half of 2024, consumer home loan credit increased by only more than 1%, while real estate business credit increased by more than 10%. This reflects that the demand for home purchases has not really recovered, even though interest rates have been reduced. The main reason is still that house prices are too high compared to the income of most people. With the ratio of house prices to income being 4 to 5 times higher than the recommended level, home ownership has become a distant goal, even for people with average incomes.

Along with that, another issue that needs attention is the ability of banks to provide long-term capital. According to Dr. Nguyen Tri Hieu, most commercial banks currently mobilize short-term capital (usually less than 12 months), while home loans last from 10 to 20 years. This mismatch between capital sources and loan terms puts banks at risk of liquidity. Without support from the Government or more flexible financial measures, banks will have to increase deposit interest rates to ensure long-term lending flows. This not only puts pressure on lending rates but also reduces the effectiveness of preferential credit packages.

To solve this problem, Dr. Nguyen Tri Hieu and many experts have proposed that the Government should mobilize capital from government bonds with long terms of 10 to 30 years. This capital can be allocated to policy or commercial banks to implement home loan programs. This will not only help reduce liquidity pressure on banks, but also ensure the stability of long-term support packages.

Despite many efforts in implementing preferential credit packages, the disbursement progress is still slow. The VND120,000 billion and VND30,000 billion credit packages were approved by the Government with the aim of supporting people to buy houses, but by mid-2024, commercial banks had only disbursed about VND1,600 billion. The main reason lies in the strict regulations on loan conditions and complicated administrative procedures, making it impossible for many investors to access loans. Many social housing projects, although approved, cannot be implemented due to problems with mortgaged assets or credit balance conditions.

In addition, the continued rise in housing prices has also made support packages less effective. According to experts from VPBank Securities Company, housing prices in large cities such as Hanoi and Ho Chi Minh City are currently beyond the affordability of most people. Overvaluing real estate not only affects homebuyers, but also reduces the liquidity of the real estate market. Instead of borrowing money to buy a house, many people have switched to saving money at banks to enjoy more stable interest rates.

Rising housing prices continue to be one of the biggest barriers for homebuyers, especially those in the low-income bracket. According to a report from Savills Vietnam, about 60% of consumers are currently looking for apartments priced between VND1.5 and VND2 billion. However, with current housing prices, even apartments in this low-cost segment are becoming increasingly difficult to access, especially in large cities. This has led to a situation where people cannot buy a house even when mortgage interest rates have been reduced.

The continuous increase in house prices has reduced the attractiveness of real estate, not only for homebuyers but also for investors. Instead of investing in real estate, small investors have chosen other investment channels such as savings to ensure financial security and enjoy stable interest rates. This has greatly affected the vibrancy of the real estate market and reduced the industry's ability to recover.

Another important issue that needs to be considered is the impact of the macro economy and inflation on interest rate policy. In the context of rising global inflation, banks will be forced to increase deposit interest rates to maintain liquidity. This could cause lending interest rates to rise again, reducing the effectiveness of support packages. According to Dr. Nguyen Hoang Duong, in the current economic context, maintaining low interest rates in the long term will become difficult without strict control from the Government.

Keeping interest rates low not only makes it easier for people to access home loans, but also helps stabilize the macroeconomy in the context of rising inflation. However, if inflation is not controlled, further interest rate cuts will put great pressure on the banking system and may lead to a financial crisis.

From the above analysis, it can be seen that reducing interest rates on home loans can bring certain benefits in the short term, helping to reduce the financial burden on people. However, this is not a comprehensive solution to completely solve the problem of home ownership in Vietnam. The core of the problem still lies in the price of houses being too high compared to people's income, along with the shortage of social housing supply and support packages that have not really been effective.

To truly make housing accessible to people, there needs to be a synchronization between financial measures and housing policies. The government needs to strengthen housing price control, develop more social housing supply, and simplify administrative procedures to make it easier for people to access preferential credit packages. Without these comprehensive measures, interest rate reduction can only be a temporary solution, not enough to create sustainable changes in the Vietnamese real estate market./.

Source: https://dangcongsan.vn/noi-hay-dung/ha-lai-suat-co-cham-giac-mo-nha-o-680562.html