VIỆN HÀN LÂM VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES NGUYEN HONG GIANG ACCESSING AND OWNERSHIP OF APARTMENTS BY INSTALLMENT LOANS OF YOUNG URBAN RESIDENTS IN HANOI MAJOR[.]
VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES NGUYEN HONG GIANG ACCESSING AND OWNERSHIP OF APARTMENTS BY INSTALLMENT LOANS OF YOUNG URBAN RESIDENTS IN HANOI MAJOR: SOCIOLOGY MAJOR CODE: 31 03 01 SUMMARY OF SOCIOLOGY PhD THESIS HANOI - 2023 Research completed at: GRADUATE ACADEMY OF SOCIAL SCIENCES SUPERVISOR: Prof Dr TRINH DUY LUAN Reviewer 1: Prof Dr Nguyen Tuan Anh Reviewer 2: Prof Dr Nguyen Huu Minh Reviewer 3:Associ Prof Dr Le Thi Thuc The thesis will be defended before the Academy-level Thesis Judging Committee, at: Academy of Social Sciences At …….hour, date ……month ……year 2023 The thesis can be found at: - Library of the Academy of Social Science - Vietnamese National Library INTRODUCTION Rationale of the research One of the key components of national socio-economic development policies is housing development Our State has issued numerous laws to assist the growth of the housing market to support those covered by social policies, lowincome individuals, and the poor who have trouble in accommodation Population ò Vietnam is about 99 million people, of which more than 33 million live in urban areas In the coming decades it is projected to increase annually by 850 -950 thousand people (GSO, 2019) The country will have more than 65.8 million people living in urban areas by 2050, with an urbanization rate of 59%, predicts the World Bank [44] As a result, the housing crisis in big cities like Hanoi and Ho Chi Minh city is getting worse These two cities account for over 50% of the nation's urban land area, according to a spatial planning analysis, and they also account for 75% of the country's net increase in urban space About two-thirds of the annual housing demand, or 244,000 out of a total of 374,000 flats, are for the Red River Delta (containing Hanoi) and Southeast Region (including Ho Chi Minh City) [45] According to the Hanoi housing development program for the years 2021-2030, the city's population is expected to reach 9.1 million in 2025 and 9.8 million in 2030 The city sets a goal that by 2025, the average residential floor space of the entire city will be 29.5m2/person, with the urban area being 31m2/person and the rural area being 28m2/person How can families of young residents who require housing get access to and own flats with affordable prices and credits under the State Support Program? The majority of the young inhabitants have not accumulated much wealth and still face several challenges and restrictions when they try to access and purchase apartments using installment loans Their apartment's quality is likewise constrained This thesis will concentrate on these contemporary issues Vietnam has made some progress in its efforts to expand the housing market, particularly regarding apartments for social policy beneficiaries and low-income individuals However, no sociological studies analyzing both the implementation process and outcomes of this policy have been conducted so far Research on how Hanoi’s young people accessing and ownership of apartments through installment loans is therefore urgently needed to help improve housing policy for urban residents at poresent In light of the current situation, the author chooses "Accessing and ownership of apartment by installment loans of young urban residents in Hanoi" as the research topic for the Sociology PhD Thesis Objectives and missions of the research 2.1 Objectives of the research Analysis of young urban residents' existing access to and ownership of flats through installment loans; contentment and engagement with their place of residence On that premise, certain proposals are made to improve the accessibility and ownership of flats by young inhabitants in Hanoi with installment loans today 2.2 Missions of the research + Overview of works relating to the thesis's subject topic + Analyze the process of obtaining information, consulting policies, and obtaining installment loans to purchase an apartment + Analyze the characteristics of apartment ownership and young residents' perceptions of ownership and use of these public utilities + Make policy recommendations to assist young urban inhabitants in Hanoi in accessing and owning current apartments Target subject and scope of the research 3.1 Target subject Young urban inhabitants in Hanoi today who have access to and ownership of public transportation in the form of installment loans 3.2 Objects of the research - A group of young residents who live in three different apartment buildings They are individuals who have gone through the process of obtaining information, consulting, owning, and using apartments - Representatives of the Management Board, the Management Board of the housing complexes; - Ward People's Committee officers; - Commercial bank credit officer in the city's housing credit program 3.3 Scope of the research Concerning the content: The thesis examines young urban residents' accesssing to and ownership of public housing in Hanoi, using housing policy with credit assistancet packages as a lever to help them fulfill their housing desire The young residents researched in the thesis are individuals who have gone through the process of accessing consultation information and owning apartments and are currently living in apartment buildings (from 2010 to the present) Concerning space: the thesis is limited to Hanoi city, with three apartment buildings chosen as case studies: PCC1 Ha Dong apartment building, Phu Luong ward, Ha Dong District; The Vesta social housing area, Phu Lam ward, Ha Dong District; CT5 Apartment, Tan Trieu Commune, Thanh Tri District Concerning time: the scope of the thesis's investigation spans the years 2010 to the present Questions and hypothesis of the research 4.1 Questions of the research - What does owning an apartment with installment loans imply for young Hanoi residents? What are the factors that influence young residents to buy rather than rent a home? - How young residents obtain information, guidance, and carry out procedures to purchase an apartment using installment loans? What are the difficulties? - How young residents rate the living conditions in their apartment buildings and neighborhoods? 4.2 Hypothesis of the research The thesis is being carried out to test the following hypotheses: - Young urban residents with average income, who are married and not own a home are the group with the highest demand for apartment ownership in the form of installment loans due to limited financial capacity This is also the best alternative for meeting their housing needs right now - Accessing information and purchasing an apartment with installment loans requires urban young residents to go through a number of sources, information channels, various consultations, and intricate legal procedures Most are obtained through informal channels, with significant challenges in legal and administrative procedures, and there are inequities in obtaining installment loans to apartments purchase - The majority of young residents who own flats are pleased with the process of acquiring, owning, and maintaining their homes and intend to stay for a long time, although there are some policy concerns Methods of the research The study employs a combination of sociological research methods, quantitative and qualitative, as following: 5.1 Literature review and analysis - Literature analysis: utilized to comprehend broad concerns relating to the topic's research material It overview the findings of previous research, current policies on apartment building management, and papers from the Government, Ministry of Construction, and Hanoi People's Committee research, thereby identifying new dimentions that have not been highlighted and explored in depth by studies - Observation method: used to assess the quality of commercial apartment buildings with flats larger than 70m2, their surroundings, social services, and facilities The author had conducted in-depth interviews with three different target groups at three different apartment buildings 5.2 Questionnaire interview A structured questionnaire is designed with key sections as follows: General information; the procedure of obtaining information; the purchase of an apartment through installment loans; The process of purchasing an apartment using installment loans from the government's 30 trillion assistance package, as well as the process of purchasing an apartment using a commercial installment loan; Apartments' current status and circumstances with installment loans; Their perspectives on issues and difficulties faced during the process of gaining access to, owning, and using the apartment building To analyze the factors affecting the process of accessing policies and information about the State's asistance package, the thesis take into account socio-demographic characteristics of the respondents such as gender, age, occupation, income, etc The data collected in the field was processed by SPSS 20.0 software 5.3 In-depth interview The in-depth interviews are employed flexibly throughout the research, in semi-structured form 21 in-depth interviews were with conducted with 21 individuals, including officers of Urban Management Department, Department of Home Affairs, Peopele's Committee of Ha Dong District, persons with installment loans now living in apartments, and people living in apartments), and people living in apartments seeking to purchase a home, members of the Management Board, members of the People's Committee of Phu Luong Ward, members of the People's Committee of Phu Lam Ward, and bank employees This method help to understand the process of delivering information on housing projects to customers, the process of obtaining bank loans, relevant current processes and policies, and other policiy problems, as well as operations on management of apartment buildings 5.4 Data processing The data obtained from the questionnaire were processed and analyzed by SPSS 22.0 software Quantitative analysis is based on a research framework and analysis model of factors affecting access to and ownership of apartments by installment loans of young residents In addition, further analytical techniques are used such as: 1) Arithmetic mean analysis (Mean) for Likert scale variables 2) Analyze the relationship between variables, to determine if there is a relationship between two variables 5.5 Sampling and field study - The field research includes three steps as follows: + In-depth exploratory interviews with apartment owners to identify aspects related to access to and ownership of installment loans From the theoretical basis and the initial practical analysis, the author composed a questionnaire and a guideline for in-depth interviews From March to May 2022, a prob sample of 10 cases (including residents, people in the management board, person in the management board) were interviewed + Experiment with questionnaire and follow-up in-depth interviews: with 20 residents of PCC1 Ha Dong apartment, CT5 Tan Trieu, and V6 Vesta Phu Lam building + The survey was conducted at apartment buildings in Hanoi city: PCC1 Ha Dong apartment building, V6 the Vesta Phu Lam building, CT5 Tan Trieu apartment building, Thanh Tri district The author directly conducted in-depth interviews with families, representatives of the Building Management Board, and the Building Management Board of 03 zones in the study area A number of officials and branches of the PC of Phu Luong ward, the Department of Home Affairs, the Department of Urban Management of the PC of Ha Dong District, officials of the Housing and Real Estate Management Department, the Ministry of Construction; Credit officers at BIDV, Vietinbank - managers who are related to the research content of the thesis were also interviewed in depth Theoretical analysis framework Theoretical analysis framework Housing Policy of the State and of Hanoi city Sociodemographic characteristics of young urban residents: - Age, household size, education - Occupation - Housing status before owning the apartment - Household income Characteristics of surveyed apartment buildings Access and own an apartment through installment loans in Hanoi Access to project and policy information - Access to advice and policies - Access to loans - Form of apartment ownership - Evaluate the process of approaching and owning an apartment with installment loans - Satisfied with the process of using Usage status - Assessment of living conditions in the residential area - Future housing plans City policies and programs credit that specifically support to buy a house with installment payment Recommendations on Housing Policy New scientific contribution of the research Research on young residents' access to and ownership of installment loans is a relatively new topic today, while the State is promoting the development of low-priced commercial apartment buildings, and sociao housing The thesis is one of the few theoretical and practical sociological studies on access to and ownership of installment loans in Hanoi at the moment The research findings will give authorities with actual and relevant information to evaluate the succesful and drawbacks of the housing assistance policy for low-income persons in recent years The theoretical and practical significance of the research Theoretical significance Research is conducted from a variety of views, including history, housing policy, and associated social issues The thesis adds fresh knowledge about various social dimentions of urban housing in Vietnam today by examining this subject It will also recommend and stilmilate further studies on the demands and challenges that young urban residents must ovecome to acquire affordable flats with installment loans Practical significance Eexamining young residents of Hanoi's access to and ownership of apartments through installment loans, the author took into account individual’s social demographic chracteristics such as gender, age, education level, occupation, living area, and so on At the same time, highlight the effects of housing policies and government assistance packages in meeting people's housing needs, particularly in the inexpensive commercial unit segment As a result, it provides Hanoi City's housing authority with scientific and practical evidence, as well as recommendations based on the research findings to improve housing strategy, policies fulfilling the needs of Hanoi's residents today The research results of the thesis can also be useful for teaching subjects such as: urban sociology, housing and urban sociology, policy sociology, management sociology… Content and the structure of the thesis Besides introduction, conclusion and recommendations, the list of published works of the author related to the thesis, the references and appendices, the thesis includes chapters: Chapter 1: Overview of the research problem Chapter 2: Theoretical and practical basis of the thesis Chapter 3: The reality of accessing apartments with installment loans of young urban residents in Hanoi Chapter 4: Actual situation of ownership and assessment of apartments with installment loans of young urban residents in Hanoi 10 Limitations of the thesis The research sample of the thesis is only focused on three apartment buildings in Hanoi where people have purchased CHCC with installment loans, leaving out the target group who are in need of purchasing but have not/did not approach and owning a house (thesis only has such cases interviewed in-depth) The research sample includes 407 household representatives in apartment buildings, so thats the findings cannot be representative for all residents of Hanoi city For some secondary materials from the Ministry of Construction, the Hanoi Department of Construction, as well as relevant reports and research, the data is incomplete and the study timelines are inconsistent, which make data incomparable for analysis Chapter OVERVIEW OF LITERATURE ON THE THESIS TOPIC This chapter finds out "gaps" in the current knowledge by making an overview of the literature on isues relating to the research topic of the thesis On housing-related concerns that the thesis will investigate and contribute to 1) Research situation abroad (research on housing policy and related social dimensions; social dimensions of urban housing problem in developing countries; housing policy for low-income people in developed countries); 2) Research situation in Vietnam (some social dimensions of the housing problem, a history of housing in Hanoi, and housing policy) By doing so, it draws attention to the problems with housing access and ownership in modern Hanoi that still require additional study 1.1 Research projects abroad 1.1.1 Research on housing policy and related social dimensions 1.1.2 Social dimensions of urban housing in developing countries 1.1.3 Housing policy for low-income people in developed countries 1.1.4 Housing policy for low-income people in Southeast Asia 1.2 Research projects in Vietnam 1.2.1 Some social dimensions of the housing problem 1.2.2 Research related to Social Housing 1.2.3 Housing history and housing policy in Hanoi 1.3 Research status and issues related to affordable housing 1.3.1 Research on affordable housing and low-income housing 1.3.2 Some international experience in the field of housing policy for lowincome people Chapter Sub-conclusion The majority of domestic research has been devoted to elucidating issues surrounding social housing development and support policies, highlighting shortcomings, challenges, and constraints associated with obtaining and owning social housing relates to social or other sociological aspects of housing for the needy However, there are hardly any sociological studies on how young people of large cities like Hanoi or Ho Chi Minh City obtain and theories that were applied in the thesis includes the urban lifestyle theory, the social stratification, the rational choice, and the theory of segregation There are two main methods used in the thesis: quantitative research with the use of questionnaires and qualitative with in-depth interviews; document analysis and observation Additionally, the author note how three apartment buildings complexes in Hanoi were chosen as the research sample and the key socio-demographic variables of the survey sample used in analisys Chapter THE REALITY OF ACCESSING APARTMENTS WITH INSTALLMENT LOANS OF YOUNG URBAN RESIDENTS IN HANOI Clarifying the current situation of the State's housing assistance programs, the obtaining information about young residents who have housing needs, and how to access loans with the kind of installment payment will be the primary topics of chapter The study of 03 apartment buildings complexes in Hanoi with the sample of 407 families has identified a number of benefits, challenges, and obstacles for the young urban residents in accessing and ownership of an apartment by installment loan in Hanoi 3.1 Access to housing policies, credit policies, state assistance programs with apartment projects 3.1.1 Some housing policies, state support programs for apartment projects 3.1.2 Some forecasts and orientations for housing development in Hanoi until 2030 3.2 Access to information of young residents in need of housing 3.2.1 Access to information about apartment apartments with installment loans of young urban residents The information in Table 3.1 demonstrates that residents have access to information on buying apartments from a variety of sources, either separately or simultaneously, to ensure its correctness and dependability and to reduce the risks involved in apartment purchase and sale transactions Applications or social networks like Facebook and Zalo, which 98% of the studied households use, play a major role among the information sources and channels that they use In which 48.6% of residents of PCC1 Ha Dong apartment complex have approached, followed by 26.3% of residents of The 11 Vesta apartment complex and 25.1% of residents of CT5 Tan Trieu apartment complex These applications are used to find out information about buying and selling apartments Online search engines like Google, Coc Coc, and websites with project information are the second source of information (and account for 86.2% of all information) Table 3.1: Access to information sources to buy apartments of residents in housing areas Source: Thesis survey, 2022 3.2.2 Access to information on policy supporting residents to buy apartment with installment loans Access to advice on buying apartments with installment loans is analyzed in three dimensions First, the context of the real estate market in the decade studied (2012-2022), the difference between affordable commercial housing and social housing Secondly, apartments with installment loans are a new solution for many people who want to buy a house, so that they not know regulations and policies when participating Third, the buyers apartments with an installment loan are usually people with average and good income, so they take into account the reputation of the investor or the location and location of the apartment complex before making decision to buy 12 Table 3.2: Access to advice to buy apartments of residents in complexes Housing / Source of advice The Vesta PCC1 Ha Dong CT5 Tan Trieu Friends/acquaintances Relatives The person of the housing project management board/ investor Real estate agent N 99 24 % 0,0 17,6 42,7 22,9 N 14 93 36 % 100,0 82,4 40,1 34,2 N 0 40 45 % 0,0 0,0 17,2 42,9 N 17 232 105 99 130 65 294 Note: Totals vary due to multiple options Calculate percentage for each option Source: Thesis survey, 2022 3.3 Access to loans to buy apartments of young residents 3.3.1 Sources of loans to buy apartments The survey shows that 362/407 families in the sample have borrowed money from banks to buy apartments Thus, the bank plays an important role in implementing the State's support policies on housing for people in general and groups of young residents' families in particular Table 3.3: Sources of loans to buy apartments Sources of loans N % Borrow from banks 362 58,1 100.0% Borrowing from relatives 205 32,9 56.6% Borrow from friends 56 9,0 15.5% 623 100,0 172.1% Note: Regarding the sources of loans borrowed, by borrower from many sources, the total is >100% Source: Thesis survey, 2022 With a set interest rate of 5% per year and a maximum loan term of 15 years, nearly 30% of respondents said they could continue using the government's 30 trillion loan package to finance property purchases in installments 71.5% of people borrow money from the bank through a 13 commercial loan package with interest rates higher - at 8% to 12% depending on the time of borrow Figure 3.1: Percentage of households using loan packages of the policy support to buy an apartment Source: Thesis survey, 2022 Table 3.4: Priority criteria for residents when choosing to buy an apartment Criteria for choosing residential area / Apartment complexes The Vesta PCC1 Ha Dong CT5 Tan Trieu Total In a central location House with high value when selling or renting Near the workplace Near the house of parents, siblings, relatives Synchronous social infrastructure system Have a good social environment Many incentives from government policies Good technical infrastructure, many facilities in the residential area Near schools and kindergartens Near the hospital N 0 33 12 96 78 96 93 99 75 % 0,0 0,0 21,7 21,1 36,2 39,6 44,9 26,7 29,2 24,7 N 98 89 35 99 54 118 165 150 134 % 52,1 2,4 58,6 61,4 37,4 27,4 55,1 47,4 44,2 44,1 N 90 80 30 10 70 65 90 90 95 % 47,9 97,6 19,7 17,5 26,4 33,0 0,0 25,9 26,6 31,2 N 188 82 152 57 265 197 214 348 339 304 % 100,0 100,0 100,0 100,0 100,0 100,0 100,0 100,0 100,0 100,0 Note: Regarding the criteria that residents prioritize when buying an apartment, because one person can choose many criteria, the total is over 100% Besides of the sources Zalo, Facebook, Google, Coc Coc applications, investor's project websites, or real estate platforms, there is other information sources from friends or family members are used But information sources 14 from authority and public services or form newpapers are less important than other sources The majority of citizens use credit institutions (credit packages from public and private banks) for loans to purchase apartments Depending on the bank, apartment buyers may borrow up to 70% of the apartment's worth over a 15- to 20-year period This has made it possible for those with low but steady incomes to acquire an apartment However, there are drawbacks to the implementation procedure as well Only those with "stable income" or those works in State agencies are eligible, among other requirements including having proof of income (in order to obtain a loan from the Bank) Benefit is crucial It is extremely difficult for "vulnerable" groups to obtain bank credit packages to purchase homes with installments, such as self-employed individuals and people with "unstable income" There seem to be a paradox: the "stable income" groups receive greater assistance from the State than the "vulnerable" ones Therefore, the state's credit policy with preferential loan packages is useful, but it must be put into practice togheter with the policy on social housing to ensure that all citizens groups can fairly access to and ownership of flats Chapter Sub-conclusion A group of young residents in apartment buildings complexes have access to information to buy apartments from many different sources The most information is on social networking sites such as Zalo, Facebook, Google, Coc Coc, etc., and on project websites of investors or real estate brokers Information sources provided by friends and relatives are also widely used Meanwhile, information sources from "government/authorities" and "newspapers" play an insignificant role Credit institutions (state credit packages and commercial banks) are most commonly used by residents to access loans to buy apartments When the broker supports the procedures and documents, the loan process is convenient and faster However, there are disadvantages in the implementation process For example, the conditions such as having a "stable income", or having to prove an income level are more profitable for groups having "stable income" or working in state agencies, but not for “vuilnerable” groups 15 Chapter THE SITUATION OF OWNERSHIP AND ASSESSMENT OF THE APARTMENTS WITH PAYMENT LOANS OF HANOI URBAN RESIDENTS Chapter will clarify the reality of using the apartment and residents' opinions on the advantages and limitations of apartment ownership; the State's policy of supporting credit to buy houses with installment payments; the management and operation services of apartment buildings; and residents' satisfaction about the living environment and their long-term attachment to the living complexes as indicators of the success of the policy to support the purchase of a house with installment payments for young residents in Hanoi currently This feedback from residents will be useful to investors, architectural design consultants, planners, housing policymakers, as well as operational management units 4.1 Features of apartment ownership and advantages and disadvantages 4.1.1 Features of apartment ownership 4.1.2 The advantages of owning an apartment The majority of residents in the three surveyed apartment complexes have been granted certificates of house ownership and land use rights within 12 years from the time of handover of the apartments The remaining 30.0% receive the certificate in about 2–3 years after receiving the house handover However, the certificates of ownership of the apartments purchased by installments are not completely valuable in terms of ownership If the apartment being purchased has an unpaid loan, the lender will hold the certificate of the apartment as collateral Thus, in this case, the apartment buyer still does not have full ownership of his apartment This is the trade-off that apartment buyers voluntarily accept in order to enjoy preferential policies, support, or meet the bank's mortgage lending regulations 16 4.1.3 Restrictions on ownership of apartments purchased on installments The three surveyed apartment building complexes have different characteristics, so the ownership of apartments in each area also has different variations The CT5 Tan Trieu complex belongs to the affordable commercial housing type, was handed over and put into use at the end of 2012 and early 2013 By the time of the survey, most of the apartments had been granted certificates, and the apartment owners can sell or transfer whenever they needed The PCC1 Ha Dong apartment building belongs to the type of commercial housing with a reasonable price but received a loan package of 30 trillion VND; was put into use at the end of 2015 and beginning of 2016 Most of the apartments have been granted a certificate, but if the apartments have installment loans the bank will keep the certificate, so they can only sell and transfer after paying all bank loans If the apartment owner transfers the apartment for an installment loan (from a loan package of VND 30 trillion), the two parties will establish a "bailiff"/ witness statment for a purchase and sale transaction, an agreement on payment and repayment of the preferential loans This is a form of “circumvention of the law” with potential legal risks that both buyers and sellers must accept The Vesta apartment building is a type of social housing, put into use in early 2018 Most of the apartments here have been granted certificates However, according to the law, social housing apartments will only be sold and transferred after years from the date of signing the purchase and sale contract, regardless of whether there is an installment loan or not This is to limit speculation and profiteering from the State's support policies However, the situation of “circumvention of the law” to buy and sell social housing apartments sometimes still takes place in reality 4.2 Assessment of young urban residents on the status in accessing and owning apartments with installment loans 4.2.1 Residents' opinions on access to information, advice and policies About half of the households said that they have easy access to a bank loan to buy a shared apartment; 42.5% of households find it normal and less than 10% have difficulties in getting a bank loan 17 Table 4.1 The levels of access to bank loan packages by income groups Very easy Household income/month Easy Neutral Difficult Total N % N % N % N % N % Under 10 million 0,0 1,7 3,2 0,0 2,2 About 10-