Buying A House With A Bank Loan Or Renting House Forever?

Young customers who are able to buy a house are customers who have worked and earned income.

Want to buy but encountered many barriers

A study by Vina Research shows that young customers who buy houses for the first time are usually between 25 and 35 years old, buying a house for a stable accommodation or getting married (account for 65% purpose of young people when buying a house). Young customers who are able to buy a house are customers who have worked and earned income.

According to Dr. Bui Quang Tin, Department of Business Administration –Banking University HCMC, Vietnam currently owns the population resources “gold” with the age from 25 to 45 accounts for 32.23%, more than half of them are 25-35 years old. Ho Chi Minh City has more than 50,000 married people each year, so the demand for housing from this source is huge.

Very few projects with long-term interest rates in the market

Young people for the first time to buy a house is one of the potential buyers of the real estate market. However, they are facing many difficulties when faced with the decision to own a house. Those difficulties are the financial barriers, barriers to choosing the product.

Need support policies from banks and investors

According to Dr. Bui Quang Tin: “Currently, banks usually have two types of payments, which is according to outstanding loans and interest payments in installments, principal payment in closing time. The periodic installment payments method for outstanding loans is better and it suited to the need to buy houses for living and clients have a stable source of income. However, Tin said that now the bank does not really support young customers when buying a house.

Regarding to financial difficulty for young customers, Le Minh Hoang Long, Faculty of Business Administration, Banking University HCMC said: “The biggest difficulty is to accumulate minimum capital for apartment purchase, accounting for 30% of the value of the apartment, almost customers have to manage this. The remaining 70% usually have to borrow from banks. “

“One advantage is that nowadays investors are linked to banks with easy loan procedures, but the difficulties come from the lending interest rates and an ability for payment” added Long.

Currently, banks usually have two forms of repayment, which are repayment according to outstanding loans and interest payments in period, the principal pay period.

On behalf of the business, Do Thu Diem, CEO of Vietcomreal said: The company offers many incentives and supports for house buyers with the free interest rate (interest rate is 0%) because the investor who on behalf of customers will pay interest until house delivery.

However, according to Ms. Diem, to encourage young people to buy a house, besides investors offer reasonable prices, a bank also should give more support. At the present, the interest rate in Vietnam is high. “If the interest rate is 6% per year, medium and luxury real estate will have good liquidity and solve many problems that are hurting the country like inflation, overloaded infrastructure. It is easy to build resettle houses, people move into apartments and spend larger land to expand roads and develop infrastructure” said Diem.

Young people have the will to buy houses and accumulate

Besides creating favorable conditions from the State, banks and investors to make policies for young customers, young people also need to make their own efforts. Young people themselves need to do three things: the determination and the will to create a house; a plan to make a purchase” said Le Hoang Chau, Chairman of HCMC Real Estate Association.

~~>>See more information about the real estate law here: Vietnam real estate law

Dr. Dinh The Hien also give advice to young people when buying a house must ensure three factors.

Firstly, for a stable family income of over VND 20 million, think about buying. Currently, apartments with prices from VND 800 million to VND 1.5 billion are suitable for young customers. However, to buy a house, young people must save at least 20-30% of the value of the apartment.

If the interest rate is 6% / year, medium and high real estate will have good liquidity

Secondly, noting three factors when choosing a house such as: Income + location + demand for use. In that financial situation must ensure, that is, should not buy the house from beyond solvency. Of which the installment payment accounts for less than 40% of the total monthly income, it’s acceptable.

Thirdly, in the first 2 or 3 years, all expenses must be reduced (no new purchases, car exchanges, travel, entertainment, etc.), maximize the source of payment and backup. Consumption at the lowest level, then gradually back to normal.

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