The signal of interest rate reduction is expected to help real estate market reactivate liquidity soon. From there, creating an impulse for the market to gradually recover and develop stably again.
During the conference on credit work in the real estate sector held at the State Bank of Vietnam, Mr. Nguyen Thanh Tung, General Director of Vietcombank said: “Just before this meeting, General Directors of commercial banks met and agreed to reduce deposit interest rates in order to reduce lending rates in general and real estate lending rates in particular”.
Previously, the issue of high interest rates had a strong impact on the liquidity of the real estate market. Therefore, information about lowering interest rates immediately received the attention of target groups in the market.
Mr. Nguyen Chi Thanh, Vice Chairman of the Vietnam Real Estate Brokers Association, said that now we are looking for ways to remove difficulties for the real estate market. The first is to remove credit sources, this is a very positive signal for the market.
“If interest rates are reduced, the market will surely have certain impulses, first it will be stable, then it will recover and develop. However, whether lowering real estate lending rates can be done is no longer based on the actual situation,” said Mr. Thanh.
Mr. Nguyen The Diep, Vice Chairman of Hanoi Real Estate Club, said that high interest rates in recent years have affected the liquidity of the real estate market. When buyers have to consider the issue of revenue and expenditure and do not pay down to buy. Besides, real estate businesses are strongly affected by difficulties in the bond channel and cannot access credit because of interest rates.
“Homebuyers all have a certain amount of money, the rest will use financial leverage. However, high interest rates discourage buyers from taking out a loan. As a result, the purchasing power dropped significantly, leading to businesses being affected in terms of cash flow,” said Mr. Diep.
According to him, if interest rates are lowered, along with the expansion of credit room, the real estate market will continue to thrive. Because, the demand in the market is still very good, especially in the affordable housing segment. However, with the social housing segment, there needs to be synchronization in credit policy, which is preferential for both investors and homebuyers with good interest rates.
“How active the market is will depend on how much interest rates fall. That is, the more interest rates fall, the stronger the real estate market will bounce back. The fact that banks mentioned lowering interest rates is good news for the market. However, the implementation depends on the stability of the economic situation and macro factors,” said Mr. Diep.
In fact, right after the Lunar New Year, savings interest rates at many banks have cooled down. On the official website of the bank, there are no banks that announce a rate of more than 10%/year.
For example, for a long time, SaigonBank has kept the highest deposit level in the market at 10.5% for a 12-month term and has lowered it to 9.5%. CBBank, OceanBank,… also adjusted the highest interest rate to 9.5%/year.
Previously, in mid-December, the Bankers Association met with member banks to call for a unified application of the maximum deposit interest rate of 9.5%/year, including plus promotions to stabilize interest rates and secure system liquidity.
The move to reduce deposit interest rates to reduce lending rates is expected to help the real estate market to reactivate liquidity. From there, the market has the impetus to recover and develop.
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Source: Vietnam Insider