Currently living with his parents in Thanh Xuan district (Hanoi), Mr. Quoc Trung and his wife have no need to buy a house, even though they have 3 billion VND in hand.
Mr. Trung plans to buy an apartment near his parents' house, then rent it out to have monthly cash flow. If he needs to move out, he and his wife will already have a house, which is convenient for both sides.
However, Mr. Trung's wife did not agree with this plan. She thought that it was a waste of money to collect every penny. Not only that, the longer the apartment was left, the more it would deteriorate and lose value. His wife thought that it would be better to save the money in the bank and get monthly interest.
The survey shows that the interest rates of banks have decreased since the beginning of May. At one bank, the online interest rate for deposits under VND10 billion, with a term of 1-5 months, decreased by 0.6% to 5.4%/year. The interest rate for deposits with a term of 6-7 months decreased by 0.2% to 7.7%/year; the term of 8-9 months also decreased by 0.2% to 7.9%/year.
Interest rates for 10-13 month deposits have decreased by 7.7% per year from the previous rate of 7.9% per year. Deposits with terms of 15 months or more are now listed at only 6.9% per year, also down 0.2% from before.
Meanwhile, Thanh Xuan area has many apartments, many apartments for rent with an area of 80 - 130m2. Rental prices range from 10 - 35 million VND/month, depending on the apartment and the apartment.
For example, an 86m2 apartment at Imperia Garden apartment building on Nguyen Huy Tuong has a rental price of 17 million VND/month; an apartment with an area of 102m2 has a rental price of 21 million VND/month.
80m2 apartment at My Son Tower (Nguyen Huy Tuong) for rent at 12 million VND/month. Rental price ranges from 17 - 20 million VND/month for a 90m2 apartment at Gold Season Nguyen Tuan.
Which option to choose?
Giving a recommendation in this case, sharing with VietNamNet reporter, Mr. Pham Duc Toan, General Director of EZ Real Estate Investment and Development Joint Stock Company (EZ Property) said that it is necessary to make the final decision depending on each time and situation.
“At the present time, when interest rates are high and house prices have also increased, buying a house and then renting it out will not be effective. Because apartments in Hanoi’s inner city are very expensive, around 3 billion VND can only buy a 2-bedroom apartment. If rented out, it will only be about 10-12 million VND/apartment/month.
Meanwhile, if you save money in the bank with an interest rate of 7%/year, it will be more effective than buying an apartment and then renting it out," said Mr. Toan.
However, Mr. Toan said that if inflation increases, buying an apartment sometimes people also expect to earn rent to offset part of the financial costs. Along with that, they expect to increase house prices and keep the property, fighting inflation. In case they cannot rent it out, they can move in, that is also an option.
“Each person has different tastes, the important thing is to choose the right real estate to buy. But in the short term, you should not buy a house, but save money in the bank as a safe option. Because the house price is high, the future price increase will not be much. In the next 2-3 years, you can buy an apartment, but in the next year, it is not effective. Buying an apartment at this stage, the supply is scarce, the price of new and old apartments is increasing, so it will cause financial losses,” Mr. Toan further analyzed.
Meanwhile, a report by the Vietnam Real Estate Research Institute (VIRES) shows that in recent years, banks have remained a safe and effective investment channel, bringing high interest rates and being easy to implement for all investors, and this trend has continued until mid-first quarter of 2023.
It is forecasted that this will still be a channel that brings good, safe and attractive profits compared to other investment channels in 2023, in the context that risks and uncertainties from the international macro environment have not ended.
However, from March 2023 to now, savings interest rates have tended to gradually decrease. Commercial banks have reduced deposit interest rates to support lending interest rates. At the same time, the State Bank is expected to adjust interest rates down to support businesses and people, causing deposit interest rates to be forecasted to decrease.
Therefore, VIRES experts believe that investors can consider structuring savings channels with flexible and suitable terms so that they can quickly switch to other investment channels with higher profitability.
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