Continued interest rate cuts along with soft policies on capital channelling into the economy have breathed new life into the property market.
Recently, several HCM City’s delayed projects have restarted thanks to successful negotiation for interest easing for apartment purchases. Lilama’s general director Le Tan Hoa said they had reached a deal with a lender which gave a green light to the interest rate of 12 percent for their home buyers.
The gradual interest rate adjustments are expected to make apartments of medium areas of 50 – 70 square meters with prices hovering around 1 billion each now saleable. “Interest rate cuts that could be the most effective instrument for demand stimulus has brought about plentiful positive implications for the real estate market”, he added.
Similarly, Tan Binh Construction and Investment JSC have just had 67 square meters Tan Mai apartments brought onto the market. This firm has entered a negotiation with several banks to provide home loans at 13.45pct which is currently under consideration for further reduction to some 12.8pct for their home buyers. As such, their customers have to deposit 35 – 42 percent of the contract value in advance for instant house delivery and make monthly principal and interest payment of 6.5 – 6.8 million dong within 15 years.
HCM City property market has seen a range of luxury, high-end, medium-end and low-end projects such as Leman C.T Plaza (Dist. 3), Tropic Garden (Dist. 2), 155 Nguyen Chi Thanh (Dist. 5), The Eastern (Dist. 9), Sunflower city (Dong Nai), C-Town and College Town II (Binh Duong) all bringing products on sale.
Likewise, Hanoi property investors have now either speeded up currently delayed projects or implemented new ones.
The second quarter has witnessed significant improvement in the pace of project execution thanks to accessible bank loans and successful capital mobilisation from partners. 2,000 square meters now take some 12 -13 days in early quarter 2 rather than 15 – 16 days as in the end of the previous year to be completed, said an insider.
Despite existing difficulties, investors would prefer put their products on sales rather than await market rally, said Hoa Phat Land Company’s general director Pham Trung Ha. In fact, demand still expands on affordable selling prices, he added.
Earlier, minister of Construction Trinh Dinh Dung blamed property market stagnancy on surging interest rates that make bank credit almost inaccessible. “What matters for the time being is channelling capital into the market. Bank loans should reach not only enterprises but home buyers as well as the market without the presence of both sellers and buyers would hardly see any transactions”, he emphasized.
Despite positive influence of lowering interest rates on the real estate market, such mere easing would barely do, according to many experts. Importantly, investors’ commitments to affordable prices, project implementation on schedule, timely house delivery and good after sales strategies should be guaranteed so as to build customers’ confidence.