According to the Vietnam Real Estate Brokerage Association, the experience of other countries shows that credit policy is one of the essential tools for governments to regulate the real estate market. Many of the policies successfully implemented by other countries can be referenced, learned from, and applied in Vietnam.
Drawing on the lessons learned from these countries, the Association proposes several credit policy solutions to stabilize the market when it experiences fluctuations of more than 20% in three months or other real estate market fluctuations that impact socio-economic stability, without affecting the demand for housing from end-users.
 Soaring real estate prices. |
The Association suggests tightening credit policies for speculators. Specifically, to reduce the number of people borrowing for speculative purposes or using excessive leverage, financial institutions can adjust lending limits by modifying the loan-to-value ratio, requiring a higher proportion of down payment, or applying higher interest rates for second-home buyers and beyond.
Secondly, enhance credit monitoring and management. As proposed by the Association, the government can impose regulations on credit quality control and require banks to provide more detailed reporting on real estate-related loans, thereby strengthening risk oversight. Establish a credit mechanism for social housing projects, prioritizing capital allocation for the development of social housing and affordable housing to meet the housing needs of low-income earners.
Additionally, the state should also adopt credit relaxation policies, including reducing interest rates and providing long-term loans with preferential rates for first-time home buyers or other priority groups to maintain social stability, such as newly married couples.
To ensure the accuracy and effectiveness of these policies, the Association believes that the state needs to develop a sufficiently large, accurate, and up-to-date database to distinguish between genuine homebuyers and those engaging in speculative or exploitative activities.
Expediting the publication of real estate transaction price indices and other influential indicators is crucial to determining when government intervention is necessary, especially amid concerns about rising real estate prices, as seen today.
For a more comprehensive regulation of the real estate market, credit policies should be combined with the implementation of real estate transfer taxes or property taxes. Moreover, when applying regulatory policies, flexibility must be considered to maintain stability in the real estate market and minimize risks.
In the last two years, condominium prices in Hanoi have risen rapidly and substantially. The price gap between Hanoi and Ho Chi Minh City’s condominium markets has narrowed (in 2019, the primary price gap between the two markets was 30%; by 2024, the gap ranged between 5-7%).
As of the second quarter of 2024, according to surveys and reports from major provinces and cities such as Hanoi and Ho Chi Minh City, condominium prices have increased by an average of 5-6.5% quarterly and 25% annually, depending on the area and location.
According to the Ministry of Construction, the localized increase in condominium prices in major cities like Hanoi and Ho Chi Minh City is due to the continued limited new supply and the small number of new projects entering the market. The scarcity of middle- and lower-class housing in the past has contributed to the rise in prices in these projects.
Ngoc Mai
