Paradox: People are not interested in cheap loans to buy houses

A survey of commercial banks in early November 2024 showed that the current interest rate for home loans ranges from 4.6 to 9.5% per year. This is considered a quite attractive interest rate for home buyers.

Meanwhile, according to the State Bank's report, although the market has not yet recovered as expected, by the end of the third quarter of 2024, outstanding credit "poured" into real estate business activities reached VND 1,274,233 billion, up 29.1% over the same period last year. However, outstanding loans for construction, repair, and home purchase only accounted for about VND 125,800 billion. Thus, it can be seen that the number of people borrowing to buy houses only accounts for a small proportion.

At the Forum "For the real estate market to return to health and development" held on the morning of November 16, Dr. Can Van Luc, Chief Economist of BIDV, cited that by the end of September, outstanding real estate credit reached VND3.15 million billion, accounting for nearly 21% of the total outstanding debt of the economy. Of which, real estate business loans increased by 16%, while home loans increased by only 4.6%. Although improved compared to last year, this increase is still low.

" The development shows that capital demand is focusing on the market supply side, namely real estate developers and investors. Meanwhile, people have little need to borrow to buy real estate ," Mr. Can Van Luc cited.

According to Mr. Luc, it can be seen that interest rates are not the cause of the above situation, because recently, the interest rate for home loans has dropped to a very low level, down about 3% compared to last year.

Many people are not interested in taking out cheap loans to buy houses. (Illustration: Minh Duc).

" The main reason why people have little need to borrow money to buy a house is that house prices are still very high, even though many investors have launched stimulus and incentive policies in recent times. While people's jobs and incomes are still very difficult, they are reluctant to borrow a large amount of money to own a house. People see house prices as too high, so they have to delay and wait for the market to have affordable products ," Mr. Luc emphasized.

Sharing the same view, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), said that a reality that the real estate market is facing is an unreasonable housing product structure, a lack of low-cost housing, and affordable housing.

In Ho Chi Minh City, from 2021 to now, the housing segment under 3 billion VND has been completely absent from the market. As for social housing, up to now, there are only about 12,000 units.

" High-end houses dominate the market while affordable products are absent, leading to unstable and unsustainable market development, " said Mr. Chau.

Sharing the same view, according to analysts from VPBanks Securities Company, the driving force for credit growth in the entire industry depends on real estate, especially demand for home loans. However, high housing prices in recent times have made people reluctant to borrow money to buy houses. Meanwhile, although home loan interest rates have cooled down, they remain high.

Mr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association also said 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 key problem still lies in the house prices 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.

Therefore, according to experts, the necessary thing to do now is to stabilize real estate prices.

Mr. Le Hoang Chau emphasized that it is necessary to develop and apply a real estate tax policy because this tool will regulate the market when there is feverish speculation or when there are difficulties and freezes. However, he noted that it is necessary to have resources to build an accurate real estate transaction and price database, regularly updated, to create a basis for application.

Sharing the same view, Associate Professor Dr. Ngo Tri Long, an economic expert, said that tax policy is an important tool to regulate the real estate market, helping to maintain stability, encourage investment and sustainable development.

" Taxation will reduce speculation and increase the stability of the real estate market. Applying a transfer tax will help reduce the participation of speculators, who only seek to make quick profits without long-term value for the economy. The market will become more stable, avoiding land fever and real estate bubbles ," said Mr. Long.

Chau Anh

Source