Prime Minister proposes preferential housing credit package for people under 35 years old

The situation of young workers having difficulty accessing housing opportunities is common, especially in big cities in the context of increasingly large gaps in housing prices and incomes.

At a conference with commercial banks on February 11, Prime Minister Pham Minh Chinh requested the State Bank and banks to research and continue to have preferential credit packages for both supply and demand to develop social housing, housing for young people aged 35 and under and those in difficulty.

In fact, the banking sector is implementing a number of lending programs for social housing and workers' housing. According to State Bank Governor Nguyen Thi Hong, credit for social housing plays an important role. Therefore, this agency recommends that the Ministry of Construction coordinate closely with localities to accurately assess demand, thereby having appropriate policies.

"For example, there are young people who just want to rent a house instead of buying, so credit needs to be flexibly designed to meet reality," Ms. Hong said.

The proposal on home loan policy for young people (aged 18-45) was also stated in a recent report sent to the Prime Minister by the Ho Chi Minh City Real Estate Association (HoREA). This association proposed that the State Bank consider building a credit incentive mechanism for young people buying low-cost commercial houses for the first time. The preferential commercial interest rate is from 6-7% per year and the loan is secured by the purchased property. The preferential interest rate period will last from 10-15 years.

Previously, HoREA also proposed studying a preferential loan policy with an interest rate of 4.7% per year for 20 years for first-time home buyers, with property prices not exceeding VND2 billion per home.

The age group of 25 - 35 is considered to be the group with good income to buy a house. Ms. Giang Huynh, Deputy Director of Savills Ho Chi Minh City Market Research Department, once pointed out that for this group, owning a house requires a certain income and balance. They are not afraid to use financial leverage to realize the ability to own real estate but are also more cautious in the matter of borrowing.

A recent report from market research firm CBRE shows that Hanoi and Ho Chi Minh City are among the top Asian cities where it is difficult for people to own a house with their current income, surpassing even Singapore.

Similarly, according to the real estate website Batdongsan, in 2024, with an average GDP per capita of about 9.5 million VND per month, a young person (aged 25-40) needs to work and save for 26 years to have enough money to buy a 60 m2 apartment, priced at 3 billion VND (conditional on a mobilization interest rate of about 4.5% per year).

According to Mr. Le Hoang Chau, Chairman of HoREA, the group of young people of working age still has a long time to do business and pay off debts, usually after about 10-15 years their income will double or increase. This group poses almost no risk to commercial banks when borrowing.

Meanwhile, with current income, most young people or people with average income can only afford to borrow to buy affordable housing projects, with prices ranging from 2-3 billion VND per unit. However, this segment is in short supply and has received little attention from investors, especially in the Hanoi and Ho Chi Minh City markets. Therefore, creating a favorable mechanism for young workers to buy affordable commercial housing will be a driving force to encourage real estate businesses to restructure their product portfolio and shift their investment to this segment.