Untangling the bottlenecks for low-income people to reach their 'dream' of buying a house

(Chinhphu.vn) - Speaking at the meeting of the Central Steering Committee on housing policy and real estate market held on the afternoon of September 22, Mr. Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association, shared many solutions to remove bottlenecks so that low-income people can buy houses.

The Government has issued many directives, resolutions and policy mechanisms.

In the context of rapid urbanization, the need for housing, especially for workers, young workers and low-income households, is becoming one of the major challenges in Vietnam. Millions of people are yearning for a stable home, while the real estate market is often heavily focused on the commercial and high-end segments.

Faced with this situation, the Government has issued many directives, resolutions and policy mechanisms to remove difficulties for the market, while encouraging the development of social housing. However, the big question is: how to put these policies into practice, turn them into specific apartments with suitable prices and reach the right people in need?

Recently, the real estate market has shown positive signs of recovery. Many social housing projects have been started, some products have been sold and put into operation. This shows the attention of the Party, State, Government and the efforts of localities and enterprises. At the same time, the industrial real estate sector has also maintained a stable growth rate, contributing to strengthening the belief that the market still has the momentum to develop.

Untangling the bottlenecks so that low-income people can reach their 'dream' of buying a house. Illustration photo source: Ho Chi Minh City Women's Newspaper

People's demand for buying houses is very large.

However, according to Mr. Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association, the real estate market is currently showing a clear imbalance between supply and demand, creating major challenges for both businesses and people. In reality, while a series of commercial housing projects, especially in the high-end segment, are in a state of inventory due to lack of purchasing power, social housing and mid-range housing are in serious shortage. This not only reflects the imbalance in the structure of real estate products but also makes it difficult to meet the housing needs of the majority of people.

One of the most worrying issues is housing accessibility. Mr. Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association, analyzed: With an average income of about 15 million VND/month, some households can consider buying a house. However, with the current common income fluctuating around only 10 million VND/month, the dream of owning a house is almost out of reach. The large gap between income and housing prices forces many people to extend their rental period, while the desire to stabilize their lives is increasingly urgent.

The survey results show that even if households have access to current loan packages, with current income levels, it will take more than 20 years to pay off the debt. This long-term loan becomes a significant burden, directly affecting people's quality of life and ability to save.

The main knots

Sharing at the meeting, Mr. Nguyen Van Khoi pointed out the bottlenecks that are actually happening.

Firstly, regarding land management and allocation, according to Mr. Khoi, land is the most important regulatory tool. Localities are the units that directly decide on land allocation for social housing. If there is a lack of land and no infrastructure incentives in social housing projects, the price of apartments will be pushed up, creating a large gap with workers' income.

Therefore, provinces and cities need to clearly specify land fund targets, ^square meters of floor space, and number of apartments for social housing in urban development plans, while applying infrastructure support mechanisms in projects and prioritizing clean land funds for social housing projects.

Second, in the financial regulation tool, the current lending interest rate for businesses is about 6.4%/year, which is considered relatively suitable. However, the loan term is too short, causing great pressure for businesses when implementing long-term projects. Therefore, it is possible to consider a loan term of over 10 years.

For home buyers, the current interest rate is still high, making the repayment of the debt last for decades. Therefore, the solution proposed by many experts is to reduce the interest rate of social housing loans to about 4%/year and extend the loan term. If commercial banks have difficulty in providing preferential interest rates, the local budget can participate in supporting part of the interest rate to reduce the burden on the people.

Third, on raw material costs and price transparency. Mr. Khoi affirmed that construction material prices have fluctuated strongly in recent years, directly affecting project costs. In this situation, local authorities at the provincial level announce and update construction material prices periodically, every 3 months, and make quick adjustments during fluctuating periods. This helps businesses make more accurate estimates, avoid capital overruns, and ensure progress.

Fourth, regarding the policy gap for the middle-income housing segment. Reality shows that the mechanisms mainly focus on social housing and high-end housing. Meanwhile, the middle-income segment - housing suitable for the income group of about 15 million VND/month, lack of mechanisms will lead to continued market imbalance, ignoring the large group of workers with average income but not yet qualified to access social housing.

V8 building belongs to the social housing project for workers in Dong Tien Industrial Park, Bac Ninh province.

Short-term, medium-term and long-term solutions

Prioritizing land funds is the solution that Mr. Khoi believes needs to be implemented clearly and first. "Localities need to specify the targets for land funds, ^square meters of floor space, and the number of apartments for social housing in planning and plans. Arranging clean land funds and supporting infrastructure in social housing projects, and supporting bank loan interest rates for buyers will help reduce input costs and thereby reduce apartment prices," Mr. Khoi said.

Regarding the credit policy solution package, Mr. Khoi suggested designing preferential credit packages specifically for social housing with an interest rate of 4%/year, with a flexible loan term of 15-20 years. Project development enterprises also need to be supported by extending the loan term to over 10 years. This is a way to help enterprises feel secure in implementing and help people reduce financial burden.

Emphasizing on supporting internal infrastructure of the project, the current practical regulations only require localities to invest in infrastructure outside the project. Therefore, the Chairman of the Vietnam Real Estate Association proposed that if the local budget supports internal infrastructure - such as internal roads, water supply and drainage systems, lighting - the price of apartments will be significantly reduced. This is a practical solution to increase feasibility.

In addition, the provincial authorities publish the price list of construction materials every 3 months and have a mechanism for quick adjustment during fluctuation periods. This transparency helps reduce the risk of capital increase and increases the confidence of both businesses and people.

Regarding the conversion of inventory projects, Mr. Khoi shared that the experience of the 2007-2012 market period showed that converting a part of commercial projects to social housing or average housing has helped to release inventory and take advantage of existing infrastructure. In the current context, there needs to be specific procedural guidelines and a risk-sharing mechanism between the government and investors for wider implementation.

Emphasizing at the meeting, Mr. Khoi said that the National Housing Development Fund should be established soon, and there should be a mechanism to encourage the participation of commercial banks and enterprises, not only in cash but also in construction. This fund will play a "supporting" role in supporting interest rates, investing in infrastructure and increasing the supply of social housing for rent and rent-to-own.

"No single agency can solve the entire social housing problem on its own. Close coordination between the Ministry of Construction , the State Bank, the Ministry of Finance and localities is a prerequisite. In addition, credit policies, interest rate mechanisms, taxes and fees appropriate for each housing segment (commercial, medium, social housing...) will contribute to preventing speculation and waste; in addition, land incentives need to be discussed and agreed upon at the macro level, avoiding overlapping or shirking of responsibility. When there is synchronization, new policies can quickly come into practice," Mr. Khoi proposed for inter-sectoral coordination solutions. According to the Chairman of the Vietnam Real Estate Association, this is the decisive condition.

"It is necessary to call on businesses to join the Government and localities to invest in social housing, reduce prices and implement socialization," Mr. Khoi added.

In general, these solutions not only solve immediate difficulties but also contribute to shaping a sustainable and balanced real estate market, and more importantly, bring homes to millions of Vietnamese people.

BAC NINH - ONE OF THE BRIGHT SPOTS IN SOCIAL HOUSING DEVELOPMENT

In 2024, Bac Ninh is considered one of the leading localities in the country in developing social housing. According to the target assigned by the Ministry of Construction, the province must complete about 10,500 apartments in 2024.

By the end of 2024, Bac Ninh will have put into use and partially completed 10 projects, providing more than 7,000 apartments, and at the same time implementing dozens of other projects with a scale of tens of thousands of apartments.

This is an important step forward, helping the locality basically meet the goals for the 2021-2025 period, while affirming its role as a "bright spot" in implementing the Project of 1 million social housing units by 2030.

To achieve this result, Bac Ninh has applied many synchronous solutions. The province proactively reviewed and supplemented land funds, requiring urban area projects to allocate 20% of their area for social housing. Site clearance work was accelerated, along with the simplification of administrative procedures, and the establishment of a Steering Committee to remove difficulties for each project.

Bac Ninh also publicizes planning and project lists to attract investors, while strengthening inspections to ensure social housing reaches the right beneficiaries.

These solutions have created a foundation for Bac Ninh to continue expanding its supply, aiming for 135,000 apartments by 2030.

Giang Oanh

Source: https://baochinhphu.vn/thao-cac-nut-that-de-nguoi-thu-nhap-thap-cham-duoc-giac-mo-mua-nha-102250922194005824.htm