Headache because of borrowing gold to buy real estate
At the end of 2020, Ms. Nguyen Thuy's family (from Nam Dinh) bought a 5-storey house in an alley with an area of 32 square meters per floor in Nam Tu Liem (Hanoi) for 2.7 billion VND.
With about 1.2 billion VND, Ms. Thuy borrowed 10 taels of SJC gold from relatives, interest-free. The remaining amount, Ms. Thuy borrowed from the bank. She said that most people in her hometown who have extra money buy gold to accumulate assets. Therefore, if they want to borrow, they have to accept borrowing gold and repay it in gold. At the time her family borrowed, the price of gold fluctuated at 54-55 million VND/tael. With 10 taels of gold, they earned about 540 million VND.
Because they thought that the price of gold would not fluctuate too much, Ms. Thuy's family focused on paying off the bank loan first. She and her husband also discussed that when the price of gold dropped, they would buy more to pay off the debt.
However, her relatives are now offering to take back the 4 taels of gold to sell for money to take care of business, causing Thuy's family a "headache" because the gold price has increased too much recently. She calculated that with the gold price of about 82 million VND/tael (updated at the opening of the trading session on September 24), the amount her family has to pay is 50% higher than when they borrowed it.
"We borrowed for nearly 4 years and the amount we have to pay has increased by 50%, more than the bank loan. If the price of gold continues to increase, we will have to pay more. Although the price of my house has increased recently, it is not as fast as the increase in the price of gold," she said.
Ms. Tran Thanh (Cau Giay, Hanoi) - shared that at the end of October last year, many plots of land in the provinces had dropped in price quite deeply. At that time, her family found a satisfactory plot of land with an area of 120m2 in Bac Giang with a price of 4 billion VND. However, because she had nearly 3 billion VND in hand, she asked to borrow 15 taels of gold from relatives.
She also said that in her hometown, everyone tends to "play it safe and be patient", so whenever they have extra money, they buy gold and store it until the price increases to sell or save it for their children and grandchildren. Most people do not have cash on hand, so if they want to borrow, they have to accept borrowing gold. At that time, the price of gold was about 71 million VND/tael, she thought the price had peaked. Therefore, when it came time to pay for gold, it would be the same as when they borrowed it or even lower.
A real estate project in Hanoi (Illustration: Duong Tam).
At the time of selling, Ms. Thanh earned nearly 1.1 billion VND and quickly paid for the plot of land she had viewed. However, recently the price of gold has been increasing sharply, while the land she bought before has not increased much, making Ms. Thanh "distorted in the face".
"Now I just hope that the gold price will soon stabilize again. This is also the first time I have borrowed gold so I have not fully anticipated the risks," Ms. Thanh lamented.
Limit the use of financial leverage
Mr. Vo Hong Thang - Director of Consulting Services and Project Development of DKRA Group - said that the nature of borrowing gold must be returned in gold. Therefore, if borrowing, it must be clearly agreed whether to return in gold or in cash according to the value at the time of borrowing.
In fact, the price of gold has increased sharply in recent times, but the price of real estate in the city center has also increased. Even the price of houses in urban areas like Hanoi has increased much higher than the price of gold in the past 3-4 years. On the contrary, there are rare cases where people have bought houses but the price of gold has not increased much yet.
However, Mr. Thang said that borrowing gold to buy real estate is not very common. If the real estate is legal, people should choose to borrow from the bank, which will be more beneficial. However, using financial leverage also requires careful calculation of the ability to repay the debt. Buyers should only borrow about 50% of the value of the real estate to ensure safety.
Mr. Le Dinh Chung - Member of the Market Working Group of the Vietnam Association of Realtors (VARS) - said that most people who borrow gold to buy houses or invest in real estate are people who do not fully understand the risks of fluctuations in this type of asset. For real estate with clear legal status, if financial leverage is needed, Mr. Chung said that it is possible to borrow from banks to a certain extent.
"If you buy in the center of Hanoi, the rate of house price increase in recent times is not too bad compared to gold. But for those who buy real estate in the province and borrow gold, they will definitely be at a disadvantage," said Mr. Chung.
According to him, home buyers should only use financial leverage of about 50% of the product value at any time of the market to ensure affordability. At present, buyers should consider using financial leverage because house prices have increased. At the same time, the real estate market is still unclear about the next trend.
Many experts also advise that real estate buyers should limit the use of financial leverage. Because currently the real estate market is still unclear whether it will continue to increase in price or adjust.
Source: https://dantri.com.vn/bat-dong-san/vay-vang-mua-bat-dong-san-meo-mat-vi-gia-vang-lien-tuc-lap-dinh-20240923164725293.htm
Comment (0)