Young homebuyers to get a foot up, photo Dung Minh

The age group of 25-35 is considered a group with good income potential to buy property.

Vu Hoai, CEO of X Group, a real estate agency in Ho Chi Minh City, said that if there was a preferential credit package for both supply and demand for housing development for young people aged 35 and under, it would have a positive impact on the real estate market.

“When the supply is diverse and has many segments for buyers to choose from, the market will develop sustainably,” Hoai told VIR. “If there is a loan package with reasonable interest rates with borrowing for a long period of 10 years or more, it would be good for buyers.”

For businesses to develop commercial housing projects, if they can borrow capital with a stable interest rate for about 5–10 years, at 8 per cent per year, it will reduce production costs, thereby making the house selling price more suitable, he added.

As for young people aged 35 and under, when borrowing to buy a house, maximum incentives should be given. The interest rate can be equivalent to the interest rate for buying social housing, about 5-6 per cent is reasonable, Hoai added.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said that young people of working age still had a long time to do business and pay off debt, and usually after about 10-15 years their income would double or higher.

“This group has less risk for commercial banks when approaching for a loan. Meanwhile, with current income, most young people or people with average income can only afford to borrow to buy affordable housing projects, selling for $80,000-120,000 per unit,” Chau said.

According to Batdongsan.com.vn, in 2024, with an average GDP per capita of about $380 a month, those aged 25-40 need to work and save for over 25 years to have enough money to buy a 60sq.m apartment priced around $120,000, with a deposit interest rate starting from 4.5 per cent per year.

However, this segment is in short supply and receives little attention from investors, especially in Hanoi and Ho Chi Minh City. The reason is that to have available land qualified to build commercial houses for sale, investors have to go through many procedures, and land purchase prices are also high.

“Therefore, creating a favourable mechanism for young workers to buy affordable commercial housing will be a driving force to encourage real estate businesses to restructure their product baskets and shift to investing more in this segment,” Chau said.

The association also asked the central bank to consider building a mechanism for people aged 18-45 years old buying their first home to receive credit loans at reasonable commercial interest rates (about 6-7 per cent per year with the loan secured by that house) for a period of 10-15 years.

Besides interest rates, experts in finance and banking also recommend that home buyers pay attention to other issues such as repayment time, principal and interest payments in accordance with their financial capacity and flexibility of the loan package.

Currently, banks are lending at a loan rate of 70-80 per cent of the house value. With a large loan amount and a long term, home buyers need to consider overall needs, and periodic repayment plans consistent with income sources to ensure loan and interest payment when it dates due.

The issue of building affordable and cheap houses is not only a leading issue in Vietnam, but also in other markets in the region.

At a seminar on affordable housing held in mid-February on Phu Quoc Island, Doan Van Binh, vice chairman of the Vietnam Real Estate Association and chairman of CEO Group, said that for a real estate market to develop safely, healthily and sustainably, there needed to be a balance between housing segments, especially meeting the needs of the majority of people for affordable housing.

“In Vietnam, the residential real estate market is currently divided into luxury and high-end, mid-range housing, and affordable and low-cost housing,” Binh said. “However, while luxury and high-end housing dominate the supply, mid-range housing has a decreasing supply ratio over the years, and the low-cost housing segment has almost disappeared.”

In 2021-2024, the Vietnamese market recorded less supply in this segment.

“In fact, the demand for affordable housing is huge and has great potential, and this is the target customer group that needs to be targeted for a healthy and sustainable real estate market, but Vietnam seems to be missing out on this segment. We need so learn the experiences and lessons from other market to develop ourselves,” Binh added.

Jeffery Foo, co-founder of the Singapore Institute of Estate Agents, said that in Singapore, the Housing and Development Board is a specialised government agency responsible for the development and management of housing areas. To support people with low or average incomes, it offers two- or three-room rental apartments, at the lowest possible rent.

“In the long term, it encourages apartment renters to consider buying the apartment they rent in instalments, with preferential instalment terms. The goal of this policy is so that people do not have to rent houses forever, but can own their own home when they can afford it,” Foo said.

Pretcha Suphapetuporn, chairman of the Real Estate Sales and Marketing Association, said that the Thai government has implemented many support plans to build affordable housing for low-income people. These include a plan to provide affordable housing for families with incomes less than or equal to $1,000-1,200 per month.

At the same time, besides the government, private companies also participate in investing in low-cost housing to provide for Thai people.

“The government will support businesses through tax reduction policies. Accordingly, if a project has a house selling price of less than $45,000 per unit, the company implementing that venture will enjoy tax incentives for three years,” Suphapetuporn added.

Vo Hong Thang, vice general director DKRA Group If this direction is widely disseminated and applied by banks, it will be a positive signal for the economy and the recovery of the real estate market in the near future. When widely applied effectively, it will partly solve the social security problem by helping young people have the opportunity to access housing and increase their living standards. This can also be considered an effective solution to stimulate demand for this type of real estate, especially the affordable housing segment to serve demand, which is high. In fact, the gap between supply and demand in this segment still exists due to the continuous lack of new supply and high primary selling prices caused by high input costs. Accordingly, buyers can consider choosing apartment projects that have been handed over and put into use for a period of 3-5 years, which already have land use and housing rights certificates and are conveniently located at the workplace or connected to the centres with more suitable prices. But above all, buyers need to carefully consider the bank loan rate, and build up a suitable loan and interest payment plan to avoid unnecessary risks that arise during the borrowing process. Now is a golden time for investors to establish their own financial plans for the medium and long-term. Specifically, businesses can proactively restructure capital sources, previously high-interest loans, arrange bond debts or encourage new loans, and boost development to quickly finish procedures to launch new products. Duong Tong, deputy head, Galaxy Group Credit incentives with low interest rates are great opportunities for young people who have stable jobs. Preferential interest rates will help reduce the initial financial burden, allowing them to accumulate and invest in real estate sooner. This is a bold and positive step forward in supporting young people to access the real estate market, gradually build assets and stabilise their future. This move can be considered a solution to stimulate demand for the affordable housing segment. However, the problem of mismatch between supply and demand of affordable house is still a big challenge. The limited supply makes this solution unable to maximise its effectiveness. Therefore, there needs to be close coordination between banks and investors to ensure supply consistent with actual demand. Investors need to quickly seize this opportunity by encouraging the development of affordable housing projects, especially in areas with high demand but limited supply. At the same time, it is necessary to coordinate closely with banks to offer attractive financial packages that suit the conditions of buyers, creating the best conditions for them to access and own a home. Strengthening marketing is also a crucial factor in attracting potential customers, especially in today’s highly competitive market.