📋 Tender Overview
Experience from a number of Asian and European countries shows that effective and selective State intervention plays a decisive role in controlling house prices and ensuring healthy and sustainable market development. A social housing project in Singapore - Typical towers The Ministry of Construction has just submitted a Draft Resolution on the mechanism to control and restrain real estate prices. The content of the Proposal states: The real estate market is a market that has a strong impact on the macroeconomy, closely linked to the finance - banking industry and social security. Therefore, when real estate prices increase beyond peoples ability to pay, it will lead to an imbalance in supply and demand, instability of the financial system, and impact on social security. In the context of continuously rising housing prices, beyond the affordability of most urban residents, many countries around the world have implemented measures to regulate real estate prices to ensure peoples access to housing, limit investment, control real estate credit and maintain sustainable development of the market. Singapore: Applying high registration tax when buying real estate from the 2nd unit or more. Accordingly, Singapore has applied high Additional registration tax for real estate buyers (ABSD) for 2nd real estate investors (20%), 3rd real estate or more (30%), foreign investors (60%). At the same time, credit is limited by applying the total debt repayment to income ratio (TDSR): total monthly debt payments do not exceed 55% of income and debt to asset value (LTV): first home loan up to 75% of home value, second home up to 45% of home value and third home or more up to 35% of home value. This country also has a public housing development policy managed by the Housing Development Board (HDB) which is a successful example in regulating housing prices. More than 80% of the population owns houses from the HDB system with selling and rent prices suitable for income. The Singapore government proactively allocates land funds for social housing, and directly supports first-time buyers through subsidies and long-term credit with preferential interest rates. Based on the above measures, house prices in Singapore are controlled and peoples access to housing is well maintained. Social housing for rent in KoreaKorea: Imposing price ceilings on apartments built on public landKorea also implements credit restrictions to control house prices. Accordingly, Korea applies the ratio of total debt to asset value (LTV): Maximum mortgage loan limit is 40% in the Seoul area, debt repayment ratio compared to annual income (DTI) is about 40%. Transaction tax for 2nd real estate investors (8%), 3rd real estate or more (12%), Comprehensive real estate ownership tax (CREHT) applies to people who own many houses or high-value houses (tax rate rampart increase the quantity and value of real estate, from 0.6% to 6%/year) The Korean government regulates price ceilings for new apartments in public housing or public land projects; The investor is not allowed to sell beyond the approved ceiling price to avoid the investor raising the price too high from the beginning. The price control mechanism for commercial housing is selectively applied in price control areas - where the selling price of new apartments must be approved by the management agency. Korea also requires declaration and transparency of all real estate sales and transfer contracts; The government closely monitors to detect illegal transactions, understatement of prices to avoid taxes or inflated prices. The country also implements the Bogeumjari Housing program implemented to provide affordable housing for people with suitable and average incomes. The Korean government regulates house prices through regulating preferential selling prices for social housing developed by state-owned companies such as Korea Land & Housing Corporation, with a pricing mechanism based on cost plus limited profit margin. In addition, the Government encourages the private sector to participate in housing development through tax incentives, land and capital support, and strictly controls beneficiaries to avoid policy profiteering. Based on the above measures, the Korean Government has reduced short-term speculation (the amount of housing transactions bought and sold quickly), stabilized some hot areas, and redirected investment in the apartment market to commercial real estate or other financial products. However, there are still some limitations in controlling house prices in Seol. Limited supply still pushes house prices up, many households own many houses due to inheritance, do not speculate but still have to pay high taxes, the market in 2022-2023 is cold, with a record few transactions in the past 10 years. Social housing in ChinaChina: Restricting real estate transactions in big citiesChina applies measures to restrict real estate transactions to control house prices. Households in big cities can only buy a maximum of 1-2 apartments; People from outside the province who want to buy must prove that they have paid taxes or social insurance in the city for 2-5 consecutive years; Businesses are not allowed to buy houses for speculation; Newly purchased commercial housing can only be resold after 2-5 years. This country also controls capital flows into real estate, limiting speculative lending; Applying the ratio of total debt to asset value (LTV) is about 30-60%, the lending interest rate for a loan to buy a second or third house (the interest rate for the first house in Beijing is about 3.05%, for the second house is about 3.45%,... and is decided by the Bank). In addition, real estate businesses are controlled by debt through three red lines specifically as follows: Ratio of liabilities to assets (after excluding advances) <= 70%; Net debt to equity ratio <= 100%; Ratio of short-term cash to short-term debt >= 1. The more red lines an enterprise violates, the tighter the new loan limit will be. C
