Advice
Millennials should not spend all their money on buying home
23/02/2019 15:31 | Source: Vnexpress
Nguyen Tran Nam, former Deputy Minister of Construction, also President of the Vietnam Real Estate Association (VNREA) says in comparison to buying, renting a home is a better solution for young Vietnamese.

In the long run, Vietnamese millennials should change their mindset from “buy” to “rent” a home, Mr Nam said at a recent conference on social housing development.

The former Deputy Minister explained: “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." Renting is now a global trend that is also emerging in Vietnam, Mr Nam added.

Nguyen Tran Nam
Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association. Photo: Realtimes

 

Alongside the rapid urbanization, high demand in Vietnam keeps pushing house prices up. The country’s urban population is growing by a million each year, said Nguyen Van Sinh, current Deputy Minister of Construction. It is expected that some 40 percent of Vietnam's population will be living in urban areas by 2020. 

Also at the conference, many experts urged Vietnam to develop social housing for rent along with units for sale.

Representative of the South Korean Institute of Land and Housing (LHI) Kim Nam-jung talked about his country’s experience in developing social housing. According to Kim, the South Korean Government has built a social housing system since the 1970s by investing capital in housing firm and established effective ways to push development of small-sized housing to accommodate low-income people.

Moreover, the government also worked to stabilize their housing market for low-income households by strengthening the supply of houses and controlling property speculation. Thanks to these solutions, nowadays, most South Koreans have the opportunity to own houses at affordable prices. 

Millennials should not spend all their money on buying home

Mr Sinh admitted that Vietnamese Government plans to get 12.5 million sqm of social housing by 2020, but now the target is only 33 percent completed. He attributed this to the shortage of funding for social housing development. In addition, local authorities have not paid enough attention to allocating land for building social housing project.

He pointed out: "Property businesses are not interested in social housing development. People also prefer owning homes to renting social ones." 

Data of the Ministry of Construction showed as of the end of last year, some 198 social housing projects with 81,700 units had been completed, and 226 others under construction now will add 182,200 more units to the market.