Tightening credit for second home loans cannot cure the root cause of rising housing prices

Experts say that to specifically treat the "disease" of high and uncontrollable housing prices, it is necessary to implement many synchronous solutions to increase supply, instead of tightening demand to prevent speculation. In particular, developing social housing and rental housing are the two most effective solutions.

Social housing development

Mr. Nguyen Van Dinh - Chairman of Vietnam Real Estate Brokers Association - commented: Price social housing In big cities, the price fluctuates from 18-20 million VND/m², with some projects in Hanoi reaching up to 27 million VND/m². However, compared to the general price level of apartments, this is still an ideal level in the current context. Therefore, developing social housing will be a solution to improve the market supply to cool down the price of commercial housing.

Mr. Dinh believes that when the supply of social housing increases, apartment prices will decrease to a level more suitable for people with real housing needs.

Developing social housing will provide supply, helping to cool down housing prices. (Photo: Government Newspaper).

Sharing the same view, Mr. Nguyen The Diep - Vice President of Hanoi Real Estate Club - commented that when the supply of social housing increases, the commercial housing market will certainly be under pressure to reduce prices, because people tend to shift their needs.

Mr. Diep also explained that the reason why the current social housing price is not as low as expected is due to the high cost of infrastructure, management and operation, loan interest and construction material prices. However, this price is still significantly lower than that of commercial housing. Therefore, localities need to proactively arrange clean land funds, invest in synchronous infrastructure to reduce costs and selling prices, creating opportunities for home ownership for the majority of people.

“ However, to attract people, there needs to be a specific legal framework for investors, and at the same time, investment in technical infrastructure is required - not only building houses but also ensuring quality, ” Mr. Diep emphasized.

According to Mr. Pham Duc Toan, CEO of EZ Property Company, the key to "cooling down" real estate prices will be social housing urban areas in the gateway areas of the capital. When these projects are completed, housing prices in Hanoi will decrease by 30-40% compared to present.

“ When the supply of social housing increases, commercial housing is forced to compete on price, and the market will then self-regulate ,” said Mr. Toan.

He cited that in some localities such as Hai Duong (old), where social housing is strongly developed, commercial housing prices cannot increase as high as in big cities like Hanoi or Ho Chi Minh City. Therefore, when issuing policies, the State should let the market self-regulate according to the law of supply and demand instead of applying administrative measures.

The State should also proactively use budget capital to develop social housing. The implementing agencies can even put profit targets aside and consider this as a public investment, implemented for social security purposes.

He cited: Singapore is one of the pioneering countries to implement this policy. Since the 1960s, the Government has established the Housing Development Authority to focus on developing social housing. Currently, the rate of home ownership in Singapore is up to nearly 90%, among the highest in the world. Of which, more than 80% of the population is living in social housing projects.

Mr. Nguyen Trung Vu - Chairman of the Board of Directors of Cen Group - also expressed his opinion: The best solution is to build more social housing and further expand the target audience. " When there are many projects, customers have many choices, large supply, housing prices will not increase rapidly like in the past ," said Mr. Vu.

To boost the supply of social housing, experts said that in the coming time, the Ministry of Construction, banks and localities need to continue to specify priority areas and clear land funds for social housing in the construction plan; speed up the disbursement of the 120,000 billion VND credit program, coordinate with the State Bank to design suitable long-term loan products; quickly resolve legal bottlenecks, simplify the approval process, determine land prices, and site clearance; promote transparency of project information, creating trust for investors and home buyers.

Promote rental housing model

In addition to developing social housing, according to experts, to cool down housing prices, it is necessary to promote rental housing, partly solving people's thirst for "housing".

Fully furnished apartments for rent will also help cool down housing prices.

With the level rental price Not too high, not putting financial pressure on people, while they still enjoy full services and utilities, the trend of renting houses will increase in the future. When people see the advantages of renting houses, they will gradually form the mentality that houses are the best place to live, not seeing it as an asset, "a savings" for their children and grandchildren. From there, house prices on the market will cool down.

Mr. Hoang Lien Son - General Director of Alpha Real Estate Investment and Brokerage Company - said: " When people rent, the cost is about 10 million/month, but if they still borrow from the bank to buy that apartment, they have to pay monthly installments of about 14 - 15 million VND in interest. This means that the cost of renting a house is only about 2/3 of the cost of buying a house and paying interest to the bank ."

Vietnam Association of Realtors (VARS) also analyzed that with current housing prices - 2-bedroom apartments priced under 3 billion have almost "disappeared". Therefore, even if you have available finance equivalent to about 30% of the apartment value and choose to borrow to buy the remaining part, equivalent to about more than 2 billion VND, borrowing to buy a house for young people still faces many difficulties.

Choosing to take out a home loan means having to repay the loan in 15-25 years, or having to cut back on many other expenses to have a shorter repayment period. This will significantly affect the quality of life. In addition, the floating interest rate is difficult to "predict" and makes many young people not dare to take out a home loan.

Meanwhile, choosing to rent a house instead of buying will help young people maintain a flexible lifestyle and reduce financial pressure in the short term.

Mr. Nguyen Van Dinh predicts that in the long term, the trend of renting instead of buying a house will continue to grow because many new rental models, which are gradually becoming popular in the world, will be more present in Vietnam.

For example, long-term rental with ownership: The tenant pays monthly and after a certain period of time (5-10 years), they can buy the house back at a fixed price or have part of the rent deducted from the purchase price. Or the shared ownership model: The buyer only needs to pay 30-50% of the apartment value in advance, the rest continues to rent and has the right to buy an additional % of ownership over time.

" Renting can only become a popular option when the rental market is more professionally developed and supported by financial policies. For example, real estate businesses participate in developing "build-to-rent" models or legal policies have mechanisms to protect tenants' rights, limit annual rent increases and encourage long-term rental contracts.

At the same time, banks have credit packages for long-term rental models with ownership rights, giving tenants the opportunity to own a house after a rental period ," Mr. Dinh commented.

Mr. Nguyen Quoc Anh, Deputy General Director of PropertyGuru Vietnam, also said that, besides financial issues, the mindset of home ownership is also gradually changing, especially with the younger generation. Currently, about 28% of renters said that they choose to rent because they like the flexibility of changing their living environment. Therefore, the trend of increasing rental demand makes the rental sector in Vietnam increasingly potential.

He said that the trend of looking to rent a house increased by nearly 22% in 2024. The group of customers aged 25-34 looking to rent the most (nearly 62%), even the high-income group from 21-40 million VND per month also had a rate of looking to rent a house up to 42% in the past year.

Source: https://baolangson.vn/siet-tin-dung-vay-mua-nha-thu-hai-khong-tri-duoc-tan-goc-benh-gia-nha-tang-cao-5061541.html