Low interest rates, people have less worries
At a recent press conference, Deputy Governor Dao Minh Tu stated that in 2023, the State Bank has continuously reduced the operating interest rate four times, with a reduction of 0.5-2%/year. In the context of world interest rates continuing to increase and anchor at high levels, this has created conditions to reduce the market lending interest rate level.
To date, new deposit and lending interest rates of commercial banks have decreased by more than 2% per year compared to the end of 2022. Mr. Tu assessed that lending interest rates are the lowest in the past 20 years and many commercial banks said that interest rates cannot be lower.
The survey shows that preferential interest rates for commercial housing loans at banks in January 2024 are lowest at 5.9%/year for short terms. When the preferential period ends, floating interest rates will be around 8-13%/year.
Mr. Vo Hong Thang, Director of Consulting Services and Project Development, DKRA Group, said that lending interest rates are low, creating favorable conditions for people. Banks are not strict about lending conditions, but only adjusting lending standards. Mr. Thang supports this issue to avoid chaos and bad debt in the real estate market.
Mr. Pham Anh Khoi, Director of the Dat Xanh Services Institute for Economic - Financial - Real Estate Research (DXS-FERI), also admitted that since March 2023, the State Bank has reduced operating interest rates 4 times.
Deposit interest rates are at their lowest level in a decade, real estate loan interest rates have cooled down, and production and business interest rates have been loosened with many incentives. These steps are very important to support people and businesses to access capital with more favorable conditions.
However, despite the reduction in interest rates, capital flows have not been unblocked. By the end of 2023, the excess capital of banks has not changed much, and access to loans for businesses and people is still very difficult, because the lending standards of banks are somewhat stricter than before.
Mr. Khoi hopes that in 2024, businesses and people will be able to easily access loans with reasonable interest rates, and the solutions proposed by the Government have had enough time to take effect. When the floating lending interest rate falls below 10%, the ability to pay of home buyers will return.
Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, said that even if the State Bank directs to reduce interest rates 4 times in 2023, it will take more than a year for commercial banks to have an actual lending reduction policy. At that time, attractive loan packages will be launched, combined with signals from the Fed (which will reduce interest rates 3 times in 2024), the interest rate risk for home buyers will be lower.
Lower lending interest rates create conditions for people to buy houses (Photo: Gia An).
Besides interest rates, the market needs more catalysts
Another issue that Mr. Pham Anh Khoi mentioned is the supply for home buyers, in addition to the issue of reasonable interest rates. That is, if people have a need to buy a house, the supply must meet it, and when supply and demand meet, the issue of interest rates will take effect.
In addition to supply, housing prices have also increased over the past years, exceeding people's affordability. A report by the Ministry of Construction shows that apartment prices in Hanoi increased by 14% by the end of 2023 compared to the previous year, while in Ho Chi Minh City they have increased for 19 consecutive quarters.
According to Savills, apartment prices have increased by 77% in the last 4 years. Finding a project of about 30 million VND/m2 in Hanoi or Ho Chi Minh City is extremely difficult.
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), also recommended that businesses restructure housing products towards real housing needs, developing affordable housing that meets people's needs - a segment that the market has been lacking for the past 3 years. At the same time, businesses should also consider reducing housing prices in the current context.
The Association recommends that competent State agencies focus on removing legal obstacles to increase supply in the market, contributing to stabilizing housing prices.
Dat Xanh Services experts predict that in the period of 2024-2025, the market will enter a process of accumulation and preparation: The macro economy will gradually improve, inflation and interest rates will be better controlled, the real estate legal corridor will gradually be completed, creating conditions for the market to become more transparent.
For customers buying real estate, Mr. Khoi advised that it is important to grasp market information and prepare finances carefully. People should limit speculation following trends and choose products from reputable units.
The market may have passed its worst phase, but the prospect of an early recovery remains a question mark. Both businesses and customers need to maintain a cautious mindset: not too extreme in the face of negative news, but not too optimistic in the face of "fake" positive signals.
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