High housing prices, "red eyes" looking for a house priced under 2 billion VND in big cities
Quang Anh's family (Ha Nam) has been planning to buy an apartment for the past 2 years, but so far, they have not dared to put down any money. In 2022, his family saved about 1 billion VND, planning to buy an apartment for about 2.5 billion VND, the remaining amount will be borrowed from the bank. However, at that time, bank interest rates were high, from 10% to 12%/year. Therefore, he temporarily put aside his plan to buy a house and waited for interest rates to decrease.
Up to now, home loan interest rates at banks have dropped to 6-8%/year during the preferential period, but Mr. Quang Anh still does not dare to buy a house because the price has increased too high.
"I am monitoring the current price of a 2-bedroom apartment in Hanoi at around 4 billion VND. My family's savings are currently around 1.2 billion VND, which is only enough for 30% of the deposit. I will have to borrow the remaining 70% from the bank. My family's total income of around 35 million VND/month will only be enough to pay the monthly interest to the bank, leaving no money for living expenses," he said.
Mr. Quang Anh's plan to buy a house is still on hold, according to him, due to high housing prices. He plans to move to the suburbs to find a house at a cheaper price, to ease financial pressure.
Similarly, Mr. Hung, an employee of a media company (Thanh Xuan district, Hanoi) said that since the beginning of this year, his family has intended to buy a house, with 2 billion VND in savings in hand, the remaining amount is expected to be borrowed from the bank.
After a period of price survey, Mr. Hung realized that the house price had increased too much. If he bought it, he would have to spend 4 billion VND, of which 2 billion VND would be borrowed from the bank. The preferential interest rate in the first year is about 7-8%/year. "Thus, my family will have to pay about 30 million VND in principal and interest each month. After the preferential interest rate period, the monthly payment that the family has to make will increase a lot," he said.
"My family's income is nearly 40 million VND/month. If we have to borrow half the value of the house from the bank, we will be under a lot of pressure to pay the debt every month. So my family is temporarily putting aside the plan to buy a house at the present time and waiting for the price to adjust," he added.
Ms. Ngoc (District 1, HCMC) said that her budget for buying a house is about 4 billion VND, of which about 2 billion is saved and another 2 billion is borrowed from the bank. She wants to buy a 2-bedroom apartment in the area around District 7. She and her husband have looked for some apartments that meet the criteria but are hesitant because they think the price is still high compared to the real value of the apartment.
She wondered: "Maybe house prices are being pushed up right now. My husband and I will wait for the market to change and for more diverse supply to have more options." According to her, there are too few new projects opening for sale on the market.
Housing prices have been increasing continuously in recent times, especially in the apartment segment, according to surveys by many units. According to data from Savills Vietnam, the price of primary apartments in Hanoi in the third quarter reached 69 million VND/m2, up 6% quarter-on-quarter and 28% year-on-year. The selling price of old apartments increased to 51 million VND/m2, up 10% quarter-on-quarter and 41% year-on-year.
Notably, apartments priced above VND4 billion accounted for 70% of the total number of apartments sold, a sharp increase compared to only 2% in 2020. Meanwhile, the segment of apartments priced below VND2 billion almost disappeared from the market, accounting for only 1% of the total supply.
According to data from CBRE Vietnam, in the third quarter, the selling price of apartments in Hanoi continued to record an upward trend in both the primary and secondary markets. In the primary market, the average selling price of apartments in Hanoi reached VND64 million/m2 (excluding VAT and maintenance fees), 3% lower than in Ho Chi Minh City.
In the secondary market, the average selling price continued to increase from the previous quarter, reaching VND46 million/m2 (excluding VAT and maintenance fees), up 5.5% quarter-on-quarter and nearly 26% year-on-year. The increase in secondary selling prices shows no signs of stopping and is currently only about VND2 million/m2 away from the secondary apartment price in Ho Chi Minh City.
The report of the Ministry of Construction stated that the increase in apartment prices is not only in newly opened projects but also in many old apartments that have been used for many years. Accordingly, home buyers are waiting for prices to decrease.
Loan interest rates have decreased, but many people still do not want to access bank loans to buy houses and land because they think this rate is still high compared to their ability to repay the debt (Photo: Manh Quan).
Low interest rates still reluctant to borrow
Home loans, since the beginning of this year, have been one of the policies that banks have promoted to increase credit growth in the context of general difficulties. Many banks have simultaneously launched new loan packages for individuals to borrow to buy medium- and long-term houses, with interest rates of 5-6%/year, equal to or only 1-2%/year higher than 12-month savings deposits.
This interest rate is applied during the first 6-36 months of the long-term loan and is considered by many bank representatives to be "unprecedentedly low".
According to a survey by Dan Tri reporters, in the big 4 group (4 banks with State capital), Agribank applies a fixed interest rate of 6%/year for the first 6 months, 6.5%/year fixed for the first 12 months (minimum loan term of 3 years), 7%/year fixed for the first 24 months (minimum loan term of 5 years) for medium and long-term loans for the purpose of buying a house, living needs and real estate business.
Meanwhile, the minimum home loan interest rate at BIDV is 5%/year fixed for the first 6 months (36-month term) or 5.5%/year for the first 12 months (60-month term), applicable to customers in Hanoi and Ho Chi Minh City. For customers outside these two cities, the minimum home loan interest rate is 6%/year, fixed for 24 months or 7%/year for the first 36 months.
VietinBank provides loans for home construction and repair with the following interest rates: 6.2%/year fixed for the first 18 months; 6.7%/year fixed for 24 months; 8.2% fixed for 36 months. In addition to the fixed interest rate period, the interest rate will be added with a margin depending on the time.
At Vietcombank, the interest rate is 5.5%/year for the first 6 months for loans under 24 months; 5.7%/year for the first 12 months for loans over 24 months; 6.5%/year fixed for the first 2 years; 8.5%/year fixed for the first 3 years. After the preferential period, the interest rate will be equal to Vietcombank's 12-month mobilization interest rate plus 3.5%/year.
Some private banks also have preferential home loan interest rates. At VPBank, home loan interest rates are 4.6%/year fixed for 3 months; 5.9%/year fixed for 6 months; 7.2%/year fixed for 12 months; 9.8%/year fixed for 18 months; 10.3%/year fixed for 24 months. Applicable to loans of at least 48 months. The interest rate margin after preferential treatment is 3.5%/year.
At Eximbank, the fixed interest rate is 3.5%/year for the first 2 months; 7.5%/year for the next 22 months. The lending interest rate after the preferential period is calculated by the base interest rate plus a margin of 3%/year. Currently, the floating interest rate of this bank is about 10-11%/year.
According to a previous report by VCBS Securities Company, in the first half of this year alone, real estate business credit increased by more than 10%, while consumer home loan credit increased by only more than 1%.
Explaining the slow growth of consumer home loans, this unit stated that the demand for home purchases has not recovered due to the limited supply of housing. Meanwhile, the sharp increase in housing prices in recent times has also caused apprehension among investors and home buyers.
Expert: Need to strongly promote the development of social housing
Economist Dinh The Hien said that in the past, the real estate channel had little risk because the market was still in its infancy and prices were low. However, currently, all segments from townhouses, apartments to suburban land have increased very high. Therefore, the risk of pouring money into real estate is higher.
For real residents, Mr. Hien said, if the buyer has observed a house for a long time and knows the exact price, and now the owner is selling it cheaper than the general market price, then they can buy it. However, with a financial level of 2 billion VND, if they want to buy a house, people have to borrow at least 1-2 billion VND from the bank.
In the context of the general economy and the real estate market not really improving, borrowing to buy an apartment also needs to be carefully calculated in terms of payment ability. If the cash flow is interrupted, it will affect the debt repayment process and cause risks for the buyer.
As for properties that are not yet fully understood, buyers should pause their plans and take the time to observe and learn. "I think that real estate prices will increase by a maximum of about 5% per year from now until 2028. If buyers still want to buy early, they need to put in the effort to find them. Buyers need to set criteria such as apartments or houses in alleys, and a financial level that can ensure payment throughout the loan period," he said.
Even if you can’t find a buyer right away, according to Mr. Hien, home buyers shouldn’t be too hasty but should stay calm. Don’t listen to brokers’ hype, as if you don’t buy right away, prices will continue to rise sharply.
Experts also advise that when borrowing capital, investors need to calculate financial efficiency based on all factors, such as loan interest, periodic principal and interest repayment source, loan term, payback period, mortgage asset options, etc.
Interest rates on home loans at many banks have decreased (Photo: Manh Quan).
Real estate expert Pham Duc Toan said that although interest rates are low, many people are still hesitant to buy houses because prices have increased too much. In addition, many businesses are still facing difficulties. Workers who intend to buy houses are also afraid that their income will decrease at any time, affecting the debt repayment process.
Bank interest rates are cheap, but the home loan process will last about 10-20 years. Therefore, some people are afraid that in the future, interest rates tend to increase and they may face financial pressure in the next stage.
According to him, currently, apartments in Hanoi are mainly concentrated in the price segment of 60-70 million VND/m2. Thus, a 2-bedroom apartment with an area of about 70m2 will cost from more than 4 billion to 5 billion VND, not including the cost of interior decoration.
To buy a house, a household must have at least enough savings to cover 30% of the deposit, equivalent to about 1.5 billion VND. The remaining amount is 70% of the house value, equivalent to 2.5-3 billion VND, the home buyer will have to borrow from the bank. Although the interest rate is currently low, with a loan of such a large amount, the home buyer will have to pay about 35-40 million VND per month.
"With current housing prices, I think a household must have a high income, at least 60 million VND/month, to be able to buy a house on installments. If a household has a lower income, buying a house will become very difficult, or even impossible," said Mr. Toan.
According to this person, to solve the housing problem, the Government needs to strongly promote the development of social housing. This way, people will have easier access to housing. Especially, in big cities like Hanoi and Ho Chi Minh City, there should be specific mechanisms to promote social housing projects.
Source: https://dantri.com.vn/kinh-doanh/co-tien-tich-cop-khach-van-ngai-vay-ngan-hang-de-mua-nha-ha-noi-tphcm-20241023085716466.htm
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