Salary 30 million VND/month but apartment under 3 billion VND is still... "out of reach"

Comprehensive solutions needed to reduce housing prices

"People lack housing but have no houses to buy. How can people afford to buy a house for 100 million VND/m²? If real estate prices keep rising, people will see that house prices are high, higher and higher, too high, people cannot afford to buy." This statement by Prime Minister Pham Minh Chinh at the meeting of the Central Steering Committee on housing policy and the real estate market early last week received special attention from the people. The statement was brief but touched the hearts of millions of people, especially those who have lived and worked for many years in big cities like Hanoi and Ho Chi Minh City.

Also at this meeting, stating the Government's determination, Prime Minister Pham Minh Chinh emphasized 11 groups of important tasks and solutions to aim at increasing supply, reducing costs, striving to keep commercial housing prices at a reasonable level, promoting the development of social housing, so that people have favorable and suitable housing conditions.

According to market opinions, the two segments of commercial housing and social housing will need separate solutions. In particular, commercial housing focuses on solving problems related to legal procedures and implementation time. Meanwhile, social housing needs to solve capital issues and policies to attract businesses to participate.

"I asked the question of what is the solution to bring down the high housing prices, how to make it reasonable and suitable for people's income. There must be many comprehensive solutions. Fiscal policy alone cannot do it, monetary policy alone cannot do it, land policy alone cannot do it, the central government cannot do it, local authorities and enterprises cannot do it. This must be very comprehensive, that is, there must be a very synchronous and comprehensive solution that is comprehensive, open and effective. There must be very close coordination between the central government and local authorities," Prime Minister Pham Minh Chinh emphasized.

Home loan interest rate needs to be below 4%

In fact, for many years now, the Party, State and Government have identified housing as an important social security policy. According to statistics, as of July this year, the whole country has 692 social housing projects being implemented. This is a step forward in the roadmap towards the goal of 1 million social housing units by 2030. Another result shows the Government's outstanding efforts: By August, Vietnam had basically completed the goal of eliminating temporary and dilapidated houses nationwide.

Back to the current market price of houses. According to data from the Vietnam Institute for Real Estate Market Research and Evaluation, about 10 years ago, apartment prices in Hanoi were only around 18 - 25 million VND/m². But now, the average figure has jumped to 75.5 million VND/m². Many high-end projects are even offering prices at 100 - 200 million VND/m².

How to cool down housing prices? According to businesses and experts, many synchronous solutions are needed.

The input costs of housing projects have increased due to the increase in land prices, construction materials, and labor costs, or investors only preferring high-end, super-luxury houses; speculation, hoarding, etc. These are the main reasons that are believed to have pushed up housing prices from the second half of 2023 until now.

Mr. Nguyen Quoc Hiep - Chairman of the Board of Directors of GP Invest Company pointed out: "Currently, the real estate supply will determine the market, whether the price increases or decreases. The time is prolonged, the investment cost is increasing. From the time of deciding on land price to valuation, the time is very long. Some projects take up to 2-3 years".

Although 9 banks have registered to participate in the preferential loan package of 145 trillion VND for social housing. After 6 reductions, this interest rate has now dropped to 6.4%/year for investors and 5.9% for home buyers. The loan term is 5 years. However, after more than 2 years, this credit package has only disbursed more than 4,000 billion VND. Although the demand for loans from businesses and people is very large.

Mr. Nguyen Van Khoi - Chairman of Vietnam Real Estate Association said: "The repayment period is too short, most businesses propose over 10 years, which will push the price down. The level for low-income people and workers to buy must be reduced to 4%"

Some opinions say that there needs to be a change in the selection of investors.

"Instead of the government having to take care of everything for social housing, from liberation to everything, you can research and consider choosing a few dozen businesses, handing them over to the businesses, so that you can set a price of only 15-20 million," said Mr. Nguyen Duc Vinh - General Director of VPBank.

The high housing prices cannot be ignored due to the market disturbances created by speculative groups. For example, a project with about 2,000 apartments, the speculative investment group can only hold 100 apartments, then continuously push up the price, creating a false scarcity, playing on the crowd psychology. Therefore, in addition to calculating the selling price from the root, that is, from the time the investor sets up the project, it is also necessary to calculate the top part, when the real estate has begun to be completed and put on the market.

Solutions to increase the supply of affordable housing in Ho Chi Minh City

Data from market research companies shows that apartment prices in Ho Chi Minh City have increased by 18-20% over the past year. Faced with the continuous price increase, many young families accept to continue renting and waiting.

However, for Cam Tu (Office worker, Ho Chi Minh City), the question of when she will be able to buy a house with the price increasing to billions of VND/apartment as recently is really an unanswerable one.

With an office job, the salary is about 30 million VND/month, plus some savings, but buying an apartment for less than 3 billion VND/unit is completely out of reach for Tu.

"I hope there will be more policy packages to support young people buying houses in terms of bank interest rates as well as apartment prices at a more reasonable level," Ms. Tu shared.

According to experts, the fastest solution for Ho Chi Minh City to increase supply and curb the rising housing prices is to plan clean land funds that prioritize the development of affordable housing.

"We need to have plans to ensure land funds for low-income and moderate-income people," said Dr. Su Ngoc Khuong - Senior Director of Savills Vietnam.

It can be seen that legal procedural difficulties when building social housing are still a "bottleneck" that makes many businesses worry.

Mr. Le Huu Nghia - Director of Le Thanh Construction and Trade Company said: "Resolution 201 was issued to speed up the procedures, but in the end, this Resolution requires social housing to be granted a construction permit. To carry out the construction permit procedure, a series of previous procedures must be completed according to regulations before being able to submit an application, which takes a very long time, while commercial housing is currently exempt from construction permits."

Faced with this reality, the City Real Estate Association recommends that authorities continue to remove legal difficulties for social housing, and urgently review about 220 projects that are still facing legal problems to find solutions to remove obstacles, create supply and reduce housing prices.

Support people in procedures to buy social housing

Not having to wait for the Government's meeting earlier this week, social housing has been a hot topic in the real estate market since the beginning of the year, especially in the two largest markets in the country, Hanoi and Ho Chi Minh City. In addition to increasing the number of social housing, people are also very interested in completing paperwork to apply for purchase.

Hanoi has 6 social housing projects expected to be completed this year, but so far, none of them have opened for sale or accepted applications, people are waiting and hoping. Because the price of social housing apartments is only from 18 - 27 million VND/m2, compared to the average price of 70 - 80 million VND/m2 of commercial housing on the market today, the price is only 1/3.

Since last June, many home buyers have been actively looking for information on social housing applications. In order to support procedures for people, the Hanoi City Public Administration Service Center has piloted mobile support for social housing purchase procedures in Dong Anh commune, with the implementation period lasting from September 15 to September 30.

After just over 10 days of pilot implementation in Dong Anh commune, Hanoi, the staff here have received over 2,000 applications. Despite the large number, there was no jostling, as most people had been informed and had their numbers taken on the online system. This is one of the solutions to help people access social housing more conveniently, avoiding going to broker channels, which can easily lead to negativity.

"The procedures at the branch in Dong Anh are very fast. This is my first time doing this but I didn't expect it to be so fast," said Mr. Nguyen Van Son (Hanoi).

Mr. Nguyen Trung Viet (Hanoi) said: "When I heard that there was a mobile consulting team, I also came and asked for advice. I saw that the application was quite simple and I could do it myself."

However, there are still times when, due to high demand, people cannot get a queue number on the I-Hanoi system, so they have to wait until the next day.

Mr. Nguyen Dinh Luong - Deputy Head of the Administrative Procedure Guidance Department - Hanoi City Public Travel Service Center said: "We also recommend to the leadership that at times of serving people under programs like this, the number of bookings on I-Hanoi should be increased so that the service for people can be better and they don't have to wait long."

In the meeting of the Central Steering Committee on housing policy and real estate market held earlier this week, Prime Minister Pham Minh Chinh affirmed that developing the real estate market and social housing is a big issue, a major matter of the nation and the people, very important, requiring many comprehensive solutions, such as reducing real estate prices, increasing supply to meet supply and demand, through resolving backlog projects, promoting social housing, reducing land prices, reducing costs, solving infrastructure problems in terms of transportation, electricity, water, telecommunications, etc.

The Ministry of Construction is researching for the Government to issue a resolution, assigning a number of capable, dedicated and talented enterprises to implement a number of social housing projects according to the principle of harmonizing the interests between the State, people and enterprises.

Source: https://vtv.vn/luong-30-trieu-dong-thang-nhung-chung-cu-duoi-3-ty-dong-van-ngoai-tam-voi-100250927065656649.htm