Rent, don’t buy homes: former official advises Vietnamese youth

By Nguyen Ha   February 24, 2019 | 03:02 am PT
Rent, don’t buy homes: former official advises Vietnamese youth
There is limited investment capital for social housing development. Photo by VnExpress/Vu Le
Former Deputy Minister of Construction says renting is a better solution for young Vietnamese, given skyhigh housing prices. 

Speaking at a recent conference on social housing development, Nguyen Tran Nam, also president of the Vietnam Real Estate Association, said that in the long term, young Vietnamese need to shift from the "buy" to "rent" mindset when it comes to housing.  

"Young people with little savings should consider not spending all their money on buying a home. They can still have the desired accommodation by renting in accordance to their financial ability and convenience for work," Nam said, adding that renting is a global trend that is also emerging in Vietnam. 

His statement comes as high demand keeps pushing house prices up alongside Vietnam’s rapid urbanization.

According to current Deputy Minister of Construction Nguyen Van Sinh, Vietnam’s urban population is growing by a million each year. It is forecast that by 2020, 40 percent of Vietnam's population will be living in urban areas. 

Experts at the conference urged Vietnam to develop social housing for rents.

Kim Nam-jung, a representative from the South Korean Institute of Land and Housing (LHI), spoke at the conference about his country’s experience in developing social housing. 

He said that since the 1970s, the Korean Government has built a social housing system by investing capital in housing companies and at the same time, established effective ways to push small-area housing developments to accommodate low-income families.

Further, the South Korean Government worked to stabilize the housing market for low-income people by strengthening the supply of houses and tightening real estate speculation. Thanks to these measures, most South Koreans today have the opportunity to own houses at affordable prices. 

Sinh conceded that currently, the government’s target to have 12.5 million square meters of social housing by 2020 is only 33 percent complete. This is because there is limited investment capital for social housing development, and local authorities have not paid enough attention to allocating enough land for social housing development, he said.

"Real estate businesses are not interested in social housing development. People also have the mentality of attaching importance to home ownership rather than renting social houses." 

According to the Ministry of Construction, by the end of 2018, 198 social housing projects with 81,700 units had been completed. 226 projects under construction now will add another 182,200 units. 

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