PM wants subsidized bank loans for homebuyers under 35

The packages should target buyers under 35 but also housing developers, he told banking industry executives at a conference Tuesday.

Central bank governor Nguyen Thi Hong, saying social housing credit has an important role to play in addressing housing issues, requested the Ministry of Construction to assess housing demand by locality for issuing effective policies.

"Some young people prefer to rent rather than to buy, and so credit needs to be designed to meet actual demand."

Houses and high-risers in Hanoi, pictured in October 2024. Photo by VnExpress/Giang Huy

Some real estate research organizations have been calling for credit incentives to help young people access housing, which remains far out of reach for most people due to the disappearing affordable segment.

First time homebuyers should get loans at 6-7% interest secured by the property they buy, and the subsidies should be for 10-15 years, the Ho Chi Minh City Real Estate Association (HoREA) suggested in a recent proposal.

It has also called on the government to consider loans at 4.7% interest for 20 years for first-time homebuyers purchasing properties costing VND2 billion (US$78,500) or less.

Young workers have long careers ahead of them and pose little default risk since their incomes double after 10-15 years, HoREA chairman Le Hoang Chau pointed out.

Giang Huynh, head of research at property consultancy Savills Advisory, said the 25-35 demographic has the income and need for housing and is willing to borrow from banks.

A study by research and consultancy firm CBRE found Hanoi and HCMC to be among the most expensive cities in Asia for homebuyers, even more than Singapore, when juxtaposed with people’s incomes.

A worker with an average monthly income of VND9.5 million, needs 26 years to pay off for an apartment costing VND3 billion at an interest rate of a mere 4.5%, according to property listing platform Batdongsan.