Loan interest rates hit rock bottom, will real estate 'take the throne'?

Interest rates hit rock bottom

In September 2023, home loan interest rates were generally below 10%/year. In the Big 4 group, BIDV had the lowest preferential interest rate at 7.8%/year and Vietcombank had the highest preferential rate at 9.5%/year. VietinBank and Agribank had preferential interest rates of 8.2% and 8%/year, respectively.

At the same time, the interest rates of commercial banks are mainly in the range of 8 - 9%/year: TPBank (8%/year), HDBank (8.2%/year), VIB (8.5%/year), Eximbank (8.5%/year). Banks with interest rates above 9%/year are SeABank (9.29%/year), UOB (9.49%/year), Sacombank (9.5%/year)...

Illustration photo. (Source: MD)

According to observations by the One Mount Real Estate Center for Market Research and Customer Insights, home loan interest rates at this time have dropped to a record low and there is a clear difference compared to December 2022.

The interest rate reduction range fluctuates strongly from 3% - 5.2%. In the chart below, for a 12-month term, the 3 banks with the lowest home loan interest rates are Vietcombank, Techcombank and BIDV at 7.5%/year.

Thus, after 4 times of reducing the operating interest rate by the State Bank, home loan interest rates have cooled down significantly and are forecast to continue to decrease by the end of the year.

Previously, the State Bank also revealed that banks committed to reducing lending interest rates by about 0.2 - 2.5% in the last 6 months of 2023, depending on the customer and sector. With the impact of policy lag and interest rate reduction commitment, it is expected that lending interest rates for the economy will continue to decrease in the coming time.

According to experts, when the lending interest rate is around 8-9%, the real estate market will react positively. Because this is the threshold that investors can tolerate when borrowing.

Mr. Tran Minh Tien, Director of One Mount Real Estate Center for Market Research and Customer Insight, commented that with the decrease in interest rates, saving is no longer the preferred option. Investors should consider other channels with higher profitability but still ensuring safety at this time.

Should I invest in real estate at this time?

According to Mr. Tien, in the real estate channel, products serving real housing needs have always been the bright spot of the market since the beginning of the year and have dominated in terms of transaction volume.

Statistics from the Ministry of Construction show that in the past 6 months, the market had about 187,000 successful transactions, reaching 36.13% compared to the last 6 months of 2022. The transaction volume decreased mainly in the land segment.

On the contrary, apartments and individual houses are still the segment recorded as a bright spot of the market, reaching 68,725 transactions in the first and second quarters of 2023.

Some opinions say this is the right time to "pour" capital into real estate. (Photo: PO)

Mr. Tien predicts that in the second half of 2023, the Western region will continue to lead the market, while the Eastern region will have a stronger supply recovery rate.

Consumption in the Eastern region showed signs of improvement since the second quarter when the number of apartment transactions in this area doubled compared to the first quarter.

“Obviously, the cooling interest rate has caused money to flow into real estate, in which the apartment type serving real housing needs will receive positive signals first. The moves from investors to adjust sales policies have eased the psychology of home buyers, stimulating more transactions,” said Mr. Tien.

Commenting further on this issue, Mr. Tran Minh Tien shared: It will be difficult to say when investors should invest or not because it depends on the needs or purposes of the buyer.

However, it is also difficult to find a time when the market has witnessed as much support as this time, from positive signals of interest rates, public investment, to preferential policies of projects.

“For example, before, investors have never had an interest support program for up to 2 years, 4 years, 8 years; or even the project has been handed over but the interest support period is still more than 1 year,” said Mr. Tien.

Mr. Tran Quang Trung, Business Development Director of OneHousing, explained that many investors have cut profits and built financial solutions through sales policies as well as payment schedules and incentives for each customer profile. That means investors accept to reduce profit margins and this is an opportunity for home buyers and investors with real financial capacity.

Mr. Trung emphasized: "Good real estate is not much affected by market factors."

Source: https://www.congluan.vn/lai-vay-cham-day-lieu-bat-dong-san-co-len-ngoi-post264316.html