To do this, the government needs to resolve legal bottlenecks, accelerate project approvals, and reduce cost burdens.

Agreeing with the spirit of introducing solutions for a healthy real estate market, Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association and Chair of the Vietnam Real Estate Brokers Association (VARS), asserted that curbing speculation is necessary but should not rely on administrative orders. Instead, market-based tools should be used to avoid undermining legitimate demand.

The Ministry of Construction (MOC) has just released a draft resolution on a mechanism to control housing prices, which includes a proposal to limit loan-to-value ratios for second-time homebuyers to a maximum of 50 percent, and third-time buyers to no more than 30 percent. What is your opinion on this proposal?

I understand that the regulatory authorities are making great efforts to research and propose solutions to control housing prices in the current context. The proposal to reduce the loan limit for second-time buyers to 50 percent, and for third-time and above to 30 percent at maximum, aims to give more opportunities for people to access housing loans for actual living needs. I fully support and appreciate these efforts and the determination of state agencies to stabilize housing prices.

However, careful and cautious consideration is needed to ensure the solution hits the target. Otherwise, it could backfire and introduce risks to the market.

What risks could arise from applying such loan caps, as you mentioned?

Currently, our real estate database is incomplete and lacks synchronization. Determining whether a home is the first, second, or more lacks clear, specific, and transparent criteria. Meanwhile, this is a critical factor in setting “caps.” It could lead to prolonged and costly loan approval processes, thus affecting transaction outcomes and creating loopholes for corruption and legal evasion.

This regulation could also become unreasonable and hinder legitimate, lawful transactions, for examples, when parents buy additional homes for their children, families purchase homes for rental business, or individuals need extra homes due to job relocations.

But some argue that in the long term, this proposal could help prevent people from taking advantage of bank loans to buy second and third homes, which may cool down housing prices. What’s your view?

If we aim for long-term benefits, we need to address the root causes of the problem directly, not just apply surface-level solutions.

In reality, rising housing prices stem mainly from supply structure and input costs, not merely from credit access. Complicated legal procedures and high land use fees are the real bottlenecks pushing prices up.

Therefore, the priority should be put on addressing these core issues first, followed by a set of coordinated measures. In fact, poorly designed measures could lead to the opposite effect. If capital flow doesn’t follow market principles, it could slow down the economy.

If this draft resolution is approved, what specific impacts do you foresee on the market?

I am concerned that limiting credit for those buying second homes or more will directly reduce demand, which could then affect supply as developers become more hesitant. 

Many projects may see lower sales, thereby, reducing developer revenues. As a result, investors could cut supply, which might actually push prices even higher, counter to the intended outcome.

China provides a clear lesson. Tightening credit didn’t lower housing prices but led to economic downturns and widespread business bankruptcies. When capital flows are blocked, the market freezes, businesses struggle, and it becomes even harder for people to access housing.

So what is the real solution to controlling and preventing housing price surges, in your opinion?

As mentioned, the root problem lies in legal bottlenecks and supply shortages. Thousands of projects have been pending, resulting in cost increases, forcing businesses to sell at higher prices to recoup investments. Input costs, especially land use fees, are also rising, further driving up prices.

The right approach is not to restrict demand but to increase supply. To do this, the government must address legal obstacles, speed up project approvals, and reduce cost burdens. When developers can bring more products to market, natural competition will help bring prices down.

What does Vietnam’s real estate market need right now, in your opinion?

I believe the market needs coordinated management that aligns with economic principles. We must aim for a transparent market with comprehensive data, where speculation is naturally limited through competition, not by restricting access to housing.

Duy Anh