Dr. Nguyen Tri Hieu: No Expectations for Housing Prices to Drop, Costs Will Continue to Rise Due to Increasing Input Expenses

At the roundtable discussion, “Opportunities for Young People: The Journey to Homeownership is Not Far Away,” Dr. Vu Dinh Anh asked financial and banking expert Dr. Nguyen Tri Hieu: “How can young people, in particular, and Vietnamese citizens, in general, increase their opportunities to own homes? While waiting for solutions from authorities, what actions should real estate developers and banks take to create more home-buying opportunities for citizens?”

In response, Dr. Hieu shared that a VND145,000 billion loan program through nine banks with a preferential interest rate of 5.9% is currently being implemented. However, the disbursement results remain low. For home buyers, especially young people, while the social housing loan interest rate is only about 6.6%, it comes with stringent conditions, making it challenging to access this capital.

“I hope the VND145,000 billion social housing loan program will be implemented more effectively to alleviate some of the difficulties. However, we need to consider commercial lending channels as we cannot rely on preferential treatments forever,” emphasized Dr. Hieu.

For those taking out loans to purchase homes, Dr. Hieu advised paying close attention to their repayment ability. Buying a home when one’s income is not yet stable and borrowing more than one can afford to pay back can lead to the risk of default.

“Don’t borrow 100 VND and then have to pay back 70 VND every month in principal and interest—that’s a threshold for bankruptcy. People need to be sober and avoid getting caught in the ‘real estate peak’ situation,” he added.

At the same time, he also suggested that the State Bank should enhance individual credit scoring to help borrowers understand their financial responsibilities and reduce the risk of bad debt in the system.

Dr. Vu Dinh Anh then asked, “Will property prices rise or fall in the next two years?” Dr. Nguyen Tri Hieu affirmed, “Don’t expect prices to drop; they will continue to rise as input costs increase.”

From a legal perspective, Lawyer Truong Anh Tuan, representing the Real Estate Association, also warned of some legal risks that young people should consider when taking out loans to buy homes.

“The biggest risk is the loss of repayment ability. In that case, the bank will seize the asset at a price much lower than its actual value. For example, an asset worth 100 VND may be valued by the bank at only 80 VND, and they may recover less than 50 VND,” said Lawyer Tuan.

Lawyer Tuan recommended that young people have a financial reserve fund to ensure timely payment and avoid losing all their accumulated assets.

Additionally, risks from the developers are also a concerning factor. Dr. Vu Dinh Anh mentioned that many real estate projects are currently not completed on schedule, taking years to finish, or the developers lack financial capacity, failing to ensure construction quality and progress, leaving buyers in a passive position, “money paid but no house delivered.”

“Young people shouldn’t worry too much, as they are dealing with state financial institutions. However, banks and credit institutions also need to consider the potential risks from the projects to protect borrowers and maintain market stability,” emphasized Dr. Anh.