Brian Jeffrey
The Ho Chi Minh City Real Estate Association (HoREA) has recommended that the State Bank of Vietnam implement a lending option for young adults, aged 18-45, to buy their first homes with commercial interest rates pegged at 6-7% annually.
This initiative forms part of HoREA’s suggestions for an upcoming event aimed at enhancing social housing and maintaining a balanced and lasting real estate sector.
In terms of financial support, HoREA is urging the Ministry of Construction and the State Bank of Vietnam to propose to the Prime Minister a reduced loan interest rate of 4.7% for low-income families in 2025, via the Vietnam Bank for Social Policies.
This would provide favorable loan options for acquiring or renting social housing, as well as funding the construction, renovation, or repair of homes, following Decree 100.
At present, the interest rate for low-income households, per an official communication from the Vietnam Bank for Social Policies, is set at 6.6% annually, which HoREA contends is excessive.
Beyond supporting low-income families, HoREA is advocating for a distinct lending framework aimed at the youth demographic.
It specifically proposes that the State Bank of Vietnam establish a scheme for individuals aged 18-45 to access home loans at a competitive interest rate of 6-7% per year, backed by the property being purchased, with repayment terms spanning 10 to 15 years.
HoREA believes that this policy could serve as a key motivator for businesses to reconfigure ongoing real estate projects and redirect investments towards affordable housing. This strategy, alongside the governmental goal to produce at least one million social housing units from 2021 to 2030, aims to ensure stability and sustainability in the real estate market.
“Most young people are entering a lengthy career phase and will likely see considerable income growth over time.
It’s typical for their earnings to double or triple within 10-15 years, which minimizes risks for commercial banks,” HoREA noted.
Furthermore, HoREA has suggested that the Ministry of Construction look into tax incentives for firms that invest in socially priced rental housing.
This includes amending the Value-Added Tax Law and the Corporate Income Tax Law, allowing social housing projects for rent to qualify for a 3% VAT and a 6% corporate tax rate.
The objective of these incentives is to bolster investment in social rental housing, thereby ensuring a consistent and affordable housing supply for those who need it.
