HCM CITY (VNS) — Public policies promoting home ownership and real estate investment are not tampered with and remain in place to nurture the market, which is recovering but still fragile, stated the US's National Association of Realtors' spokesperson in Viet Nam.
Vinh Nguyen, the NAR president's liaison in the country, was speaking at a seminar held by the HCM City Real Estate Association (HOREA) in the city on Tuesday. He said: "Our top priority is to ensure home ownership remains affordable and accessible."
One of the greatest threats to this is mandating a high down payment that would keep qualified buyers out of the market, he said.
To ensure a real-estate recovery, the US continues to offer tax breaks to promote home ownership and property investment, he said.
The breaks include deduction of interest on mortgages from income for tax purposes and waiver of capital gains tax on up to US$250,000 on the sale of the primary house for an individual and $500,000 for a married couple.
The association is working on visa reforms to benefit global house buyers, he said.
HOREA chairman Le Hoang Chau said Viet Nam's housing market needs policies to ensure reasonable prices and to see recovery.
"For many middle – and low-income people house acquisition is still out of reach."
He compared the prices of social housing in Indonesia and Viet Nam, saying in the former it costs $7,500 for a one-bedroom apartment and $15,500 in case of two bedrooms, while in Viet Nam the prices are double.
Indonesia's average income is higher.
He also said the price structure needs to be tweaked in Viet Nam, pointing out that developers have to pay for land and also for the right to use it.
High construction costs due to steel and cement price hikes, and mortgage interest rates of up to 25 per cent in 2008 and around 13 per cent now are other hurdles, he said, calling for a further lowering of the interest rates.
Tortuous administrative procedures involved in developing a project also adds to the price in the form off high management and opportunity costs, he said.
The Government's programme to lend VNÐ30 trillion ($1.43 billion) at low interest rates to buyers and developers of low-priced housing should be accelerated since less than 1 per cent of the amount has been disbursed so far.
A representative from Savills Viet Nam's HCM City said the disbursement is a positive sign that the market is reacting to the package and it may have a positive impact on demand in the residential market. The city housing market saw impressive growth in the third quarter, with the highest number of units being sold since the same period in 2011 and a rise of 52 per cent year-on-year. — VNS