According to the Vietnam Real Estate Brokers 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.
Based on the lessons learned from these countries, the Association proposes several credit policy solutions to stabilize the market when there is a fluctuation of more than 20% in three months or when there are 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 loan 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 per the Association’s proposal, the government can impose regulations on credit quality control and require banks to provide more detailed reports on real estate-related loans, thereby strengthening risk oversight. Establish a credit mechanism for social housing projects, prioritizing capital allocation for projects that develop affordable and social housing to address the housing needs of low-income earners.
Additionally, the state should also have a credit relaxation policy, 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 activities.
Expediting the publication of real estate transaction price indices and some influencing indicators is essential to determine when the state needs to intervene, especially with the current concerns about rising real estate prices.
For a more comprehensive regulation of the real estate market, credit policies should be combined with the application of real estate transfer taxes or property taxes. Moreover, when implementing regulatory policies, flexibility should be considered to maintain stability in the real estate market and minimize risks.
In the last two years, the condominium market in Hanoi has seen rapid and significant price increases. The price gap between Hanoi and Ho Chi Minh City’s condominium markets has been narrowing (in 2019, the primary price gap between the two markets was 30%; by 2024, the gap ranged only between 5-7%).
As of the second quarter of 2024, according to surveys and reports from some 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 some major localities like Hanoi and Ho Chi Minh City is due to the continued limited new supply and the small number of new projects being launched. The scarcity of middle- and lower-class housing segments has contributed to the rising prices in these projects.
Ngoc Mai
