Many young people want to buy a house but are still afraid of high interest rates. (Photo: Vietnam+)
Housing prices in Hanoi are now more than 20 times higher than the average income of a two-worker household, making the dream of settling down for young people increasingly distant. In this context, financial leverage becomes a “lifesaver” but also poses great risks if not used properly.
That was the opinion of many experts at the workshop “Using financial leverage effectively - Housing opportunities for young people,” held on June 26 in Hanoi.
High demand for home ownership among young people
Speaking at the workshop, Mr. Ha Quang Hung - Deputy Director of the Department of Housing and Real Estate Market Management, Ministry of Construction said that the group of people aged 22 to 40 is gradually becoming the main home buying force, replacing the previous middle-aged group. In Ho Chi Minh City alone, there are about 1.6 million young people who are in need of owning a house, creating a huge demand for the real estate market.
“The demand for home ownership among young people in Vietnam is reaching a record high, both in terms of quantity and proportion of total home buyers,” Mr. Hung emphasized.
However, house prices in big cities are currently very high, around 3-4 billion VND for a 70m2 apartment, causing young people to spend 20-25 years of income to be able to buy a house. This is the ratio of house price to personal income among the highest in Southeast Asia. In fact, most young couples in urban areas with an income of 20-30 million VND/month still have to rent a house or live with their family. Owning a house before the age of 30 is almost impossible without support from family or preferential loan packages.
The biggest barriers today are the limited supply of suitable housing, lengthy procedures for investing in real estate projects, and rising prices beyond the affordability of the majority of people. In addition, the model of long-term rental or flexible rental purchase is not popular, making it difficult for young people to choose a suitable housing option. In terms of finance, commercial home loan interest rates are still quite high, with short loan terms, not meeting the expectations of young people who want to reduce the pressure of monthly debt repayment.
Mr. Hung said banks are willing to lend, but young people only dare to borrow when there are preferential packages with low interest rates fixed at 5%-6% in the initial period. Long loans of 20-30 years are also an important factor to reduce financial pressure for young home buyers.
Dr. Nguyen Tri Hieu also said that the average apartment price in Hanoi currently ranges from 70-80 million VND/m2, which means that a 70m2 apartment costs about 5 billion VND. Meanwhile, the average income of a household of two workers is only about 21.4 million VND/month, equivalent to 256.8 million VND/year. Thus, the housing price/income ratio in Hanoi has reached 20 times, and according to the Ministry of Construction, this number is even higher - nearly 24 times, while the global ideal level is only about 5-7 times.
According to Mr. Hieu, the reason why housing has become out of reach for the majority of people is due to many factors such as the adjusted land price list approaching the market price, the sharp increase in project input costs, the market development out of sync with the priority given to the high-end segment, along with cumbersome administrative procedures, uncontrolled speculative activities and difficult access to policy capital.
“The skyrocketing prices of materials, labor, and land use fees have caused housing prices to skyrocket. Meanwhile, the supply of affordable social and commercial housing is extremely scarce,” Mr. Hieu pointed out.
Meanwhile, financial expert Dr. Vu Dinh Anh emphasized that using smart financial leverage is the key to helping young people make a breakthrough in borrowing to buy a house.
Mr. Anh pointed out three important factors for young people when deciding to buy a house: choosing a house that fits their affordability instead of chasing investment expectations. Choosing a reputable financial partner, avoiding hot loans or black credit, having a reasonable financial plan, and effectively managing personal finances.
Mr. Anh warned that many young people fall into a debt spiral due to borrowing from banks and then having to borrow money from outside to pay off the debt when they cannot keep up with their cash flow. Therefore, choosing the right loan and managing personal finances are vital skills in the journey of buying a house.
Credit flows are directed towards the affordable housing segment.
On the policy side, Ms. Ha Thu Giang - Director of the Department of Credit for Economic Sectors (State Bank) said that the banking industry has had many solutions to support young people in accessing housing. The State Bank issued circulars to create credit space, direct priority capital flows to the low-cost housing segment, and closely coordinate with the Ministry of Construction to implement according to the direction of the Government and the Prime Minister.
Currently, there are 9 banks participating in the 145,000 billion VND credit package with interest rates 1.5% - 2% lower than normal, the lowest lending interest rate is currently 5.9%/year. In particular, young people under 35 years old enjoy preferential interest rates 2% lower in the first 5 years and 1% lower in the first 10 years compared to the average interest rate of large banks.
“The young generation is the main source of labor, so creating conditions for them to buy houses is very necessary. The most difficult problem is finding projects with prices that are affordable for young people,” said Ms. Giang, adding that coordination with localities and leveraging bank credit will help young people stabilize their lives soon.
Accompanying young customers, Agribank has implemented a preferential loan program to buy social housing for young people under 35 years old, with a scale of 10,000 billion VND from May 2025 to the end of 2030. Preferential interest rate of 6.1%/year, maximum loan term of 15 years, simple procedures and loans up to 100% of capital needs, allowing the purchased apartment to be used as collateral.
To date, the program has disbursed nearly VND1,600 billion to 710 young customers. Ms. Dang Thu Thuy, Deputy Head of Agribank's Personal Customer Department, commented that this product helps young people with low to medium incomes easily own a house, increase motivation to develop their careers and stabilize their long-term lives in urban areas.
However, expert Nguyen Tri Hieu hopes that the VND145,000 billion social housing loan program will be better implemented to partly resolve the difficulties. However, it is necessary to consider commercial lending channels because we cannot rely on incentives forever. When borrowing to buy a house, people must consider their ability to repay the debt, avoiding "taking advantage of the peak" of real estate. Do not rush to buy a house if your income is not stable enough, do not borrow VND100 but have to pay VND70 per month in principal and interest, that is the threshold for bankruptcy," Mr. Hieu emphasized.
Mr. Hieu also suggested that the State Bank strengthen personal credit scoring activities to raise awareness of borrowing and repayment and reduce the risk of bad debt in the system./.
Source: https://baolangson.vn/don-bay-tai-chinh-va-chinh-sach-tin-dung-co-hoi-an-cu-cho-nguoi-tre-5051364.html
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