It is necessary to offer preferential loans to more types of customers, rather than focusing primarily on low-income people, an official said.

Tran Du Lich

Tran Du Lich, member of the National Financial and Monetary Policy Advisory Council, further explained the problem in an interview about the VND30 trillion (USD1.4 billion) real estate rescue package.

The disbursement of this package to help low-income people has been slow. What is your opinion on how the package will impact the market?

VND30 trillion is a small amount in light of the current situation.

Our policies should focus mainly on Hanoi and HCM City where there is a high demand for housing. Also, our preferential loan programme, which offers loans with a 6% yearly interest rate, should be expanded to benefit more consumers, not just low-income people.

Customers in other provinces and cities who buy homes that cost between VND500 and VND700 million should also be supported.

What are the main difficulties facing this rescue project?

The biggest issue is how to identify low-income customers and a social housing. It will be difficult to create standards to identify the two in this country.

What is your assessment of the real estate market in the short-term?

Domestic prices have been rising for many years, but there are some ways to alleviate this. There has been a lack of focus on homes in the price range of around VND1 billion, though they are in high demand. This would be a good area to place our focus.

So, what do you see as the best solution?

It will take at least two or three years before the real estate market sees signs of recovery. The stimulus package will help, but we can only hope to see a recovery in on the high end of the market. For this, other economic problems, such as bad debt and disappointing growth rates, must be solved.

Banks have loosened their lending policies in an attempt to attract individual home buyers. In the long-term banks will start considering more loans to investors. But investors must also consider lowering prices to attract more customers.