The Interest Rate Reduced, The Price Of Housing Down?

The Interest rate reduction of banks although not directly affect the real estate market. However, many investors are excited.

Fight each other

After the regular government meeting in September with the resolution just issued, commercial banks began to plan to reduce interest rates. The Governor of the State Bank also issued Directive 04, instruct credit institutions to balance capital, save costs and reduce lending interest rates. So far many banks have announced lower interest rates on loans.

For example, today, Vietcombank has cut interest rates on five priority sectors and start-ups. Specifically, short-term interest rates reduced dramatically to a maximum of 6% a year. The adjustment is down 1% per year compared to the current level. For startups, the 7% loan rate will fall by 2% a year.

Mr. Nghiem Xuan Thanh, Chairman of the Board of Directors of Vietcombank, said that businesses that have overall products with Vietcombank, banks may consider the further reduction. The reduction of interest rates will be made by Vietcombank until 2016. By 2017, the bank will be based on the macroeconomic situation, credit policy of the State Bank to have specific plans.

Real estate market in the coming time is forecasted to grow stronger if the interest rates in this field lower.

According to calculations of Vietcombank, this reduction will reduce the interest rate of VND100 billion. However, Vietcombank will seek to reduce the costs to make up for this and ensure that the profit target is still met.

“We expect that Vietcombank will reduce lending rates as a motivation for other banks to support their businesses. The liquidity of other banks is good so they can be reduced. If the business is healthy then the bank is healthy “- said Thanh.

Similarly, Lien Viet Post Office adjusted down lending interest rates from 15 October. Accordingly, the bank will reduce 1% -1.5% pa for new short-term loans, with priority given to household and business loans in rural areas and small and medium enterprises. The foundation for Lien Viet Post Office to reduce its lending interest rates is its abundant resources and cheap capital.

Previously, October 10, HDBank also reduced interest rates 1%, down to 10.5% per year. The bank also offers the preferential credit of VND 18,000 billion in short-term interest rate from 6.5% per annum. The medium and long-term preferential interest rates are fixed at only 9.69% per annum for supporting businesses.

In late September, BIDV Bank and Vietinbank jointly decided to reduce deposit rates to shorten the gap with Vietcombank.

According to Nguyen Thi Hong, Deputy Governor of the State Bank, from now until the end of the year, the demand for credit has increased compared to the first months of the year. Some large commercial banks will adjust down deposit rates when the liquidity of the system continues to be surplus. This will be a good base for credit institutions to reduce their lending rates.

Buyers benefit?

Most real estate firms have received bank information to lower interest rates. Nguyen Van Duc, deputy director of Dat Lanh Real Estate Co., said that when the bank lowered lending rates, not only real estate but also all other professions.

“Banking interest has a big impact on real estate business. Bank interest rates are not happy at all. In 2008-2009, banks applied to interest rates of up to 20% -25%, causing a series of real estate companies, secondary investors white-handed, “he said.

Buyers will have more options if interest rates on investment loans and real estate purchases are easier.

He added that banks will lower interest rates, businesses will reduce costs and lower prices. Buyers also benefit because of the good price. The liquidity of the bank is also better because there are many borrowers. “The interest rate reduced by 1%, the price of the house can be reduced by 0.5%” – he confirmed.

Mr. Luong Si Khoa, Vice Chairman of An Gia Investment Management Board, said that any real estate project was built by three sources: bank loans, own capital of investors and capital mobilization of customers.

“The bank’s lower interest rates will create good liquidity for the real estate market. It directly affects the selling price to customers. Surely the price of the house will decrease but reduce how it will have to wait for some more time to know “- Khoa said.

Meanwhile, representatives of Vietcomreal said that although the interest rate reduction of the bank does not currently have a group of real estate companies or borrowers to buy houses, indirect benefits may occur in the future, when other economic sectors flourish.

“Vietnam should adjust lending rates at 6% per year is reasonable. The State Bank must stimulate consumption and production by lowering interest rates. The people with good income, stable, of course they will be more boldly to borrow money to buy a home, “the representative said.

According to Vietcomreal, if the interest rate is 6% / year, the medium and high-end real estate segment will have good liquidity and solve many problems for the country such as inflation, infrastructure development. , it is easy to resettle housing when people gather in the apartment, spend more land to expand the road …

Real estate is the key industry for the country

“Real estate is a key industry for the country. For example, the architects, engineers, offices, secretaries, brokers, advertising, marketing … in the real estate industry a lot. Workers in the steel, brick, cement and chemical industries are also large.

Then come to the design industry, pictures, the production of beds, cabinets, mattresses, decorative lights, sanitation workers, protection … Lower interest not only affects the real estate but also create jobs for millions of people in other areas “- the representative said.

Home buyers, as well as the real estate market, will benefit indirectly when interest rates fall.

Le Hoang Chau, chairman of HCMC Real Estate Association, received news of the bank lowering interest rates with a conservative attitude. “Banks lower interest rates, but have announced who will be borrowed or not? By that time the State Bank has restricted the credit of real estate. Capital for real estate is not encouraged, “Chau said.

Chau said the interest rate is the card to lose business in Vietnam at home. Foreign businesses are allowed to borrow at interest rates of 4% -5%. While domestic real estate firms pay interest rates up to 9% -10%. “The cost of paying interest is twice as high. Foreign companies do not win new, “Chau said.

However, HCM City Real Estate Association Chairman also said that when the interest rates are lower, people will have less money to deposit into the bank but to capital for production and business. In particular, real estate is also a better investment channel than buying dollars or storing gold. Therefore, the real estate market will flourish.

Experts Nguyen Tri Hieu said that a series of large banks lower interest rates is a very good sign for real estate business in the business season. Because most real estate businesses use loans from banks. “Enterprises, buyers will benefit from this,” said Hieu.

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