Official argues for low-income housing fund

Low-income people who want to buy their own house need support in saving and the establishment of a fund would be vital, an official has said.

Nguyen Manh Ha, Director of the Ministry of Construction (MoC)’s Department of Housing and Real Estate Market Management, told DTiNews that the ministry has proposed establishing a house saving fund in order to support low-income people wishing to buy a house.

Current housing prices are too high compared to most people’s financial abilities, how can we resolve this?

It’s not really true that low-income people can’t afford housing. These people should opt to buy a small house or live in a rented house and then upgrade it gradually when appropriate to their incomes. Previously, state officials had to live in thatched-roof houses, but thanks to economic development, we’ve tried our best to improve our living standards. Each person should make an effort to get a good job and save to buy their own home.

Many people are aware that they need to save money in order to buy a house. However, in fact, a lot of them still can’t afford to meet spiralling house prices. Will personal savings prove enough?

I think that a house saving fund can help people as it could be a good financial channel that fosters the idea that saving is good. Anyone who wants to buy a house has to save money.

According to the MoC’s proposal, 30% of the capital for the house saving fund could come from profits of a housing lottery and bond issuance while the rest may be contributions from the housing development fund, people’s savings, and the State budget.

Individuals and households contribute to the fund monthly based on their expected loans in the future, instead of their total incomes. They can buy houses with average area of around 50 square metres each when they have contributed a minimum of 30% of the house’s value for five years. The loan will have a 15-year term with an estimated interest rate of 5% per year.

What will happen if those who have borrowed money for their house buying can’t maintain their instalment plans let alone repay the loan?

In cases where borrowers encounter difficulties, the Government could provide them with certain assistance, such as allowing them to rent a house that is built for the disadvantaged, and requiring them to return their bought house.

What will we do if a house buyer tries to avoid payments after entering the scheme?

In cases, we’ll apply strict sanctions to require them to repay the loan.

It is estimated that in the next three to five years, increasing numbers of people may take part in the house saving fund. Has the ministry carried out any study to predict the demand for future housing supply?

In the next three years when a house saving fund has been set up, we can definitely estimate people’s demand and we will outline appropriate housing development plans.

People should contribute to the fund monthly based on their expected loans in the future.

Source DTInews

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market