Along with the adjustment to reduce deposit interest rates, some banks have announced to reduce lending interest rates on some products, including real estate.
Specifically, at Agribank , loans for real estate business purposes as of January 31, 2023 that are affected by the COVID-19 pandemic will be considered for a maximum interest rate reduction of 3%/year compared to the old interest rate. The maximum adjustment period is until the end of this year and will be applied from January 31, 2023 to December 31, 2024.
BIDV Bank has launched a VND100,000 billion credit package for customers borrowing to serve their living and production and business needs, including home loans, with interest rates from 10.3%/year in the first 12 months from the time of first disbursement; or from 10.9%/year in the first 18 months from the time of first disbursement.
According to experts, banks' reduction of lending interest rates will gradually warm up the real estate market. (Illustration: Thanh Nien)
Not only the “big guys” in the industry, the trend of reducing lending interest rates has also spread to some joint stock commercial banks. For example, MBBank adjusted its lending interest rate from only 8.5%/year. Banks such as Techcombank, Sacombank, SeABank, Ban Viet… also launched credit packages with preferential interest rates reduced by 1-2 percentage points compared to the normal interest rate.
The information that banks have simultaneously reduced their savings and lending interest rates is considered by experts to be a positive signal for the real estate market, as the average deposit interest rate falling to below 7%/year may pull lending interest rates down to around 10%/year. This will greatly support businesses, investors, and individuals borrowing to buy real estate.
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, predicted that in the coming time, home loan interest rates at banks are expected to decrease to 10 - 11%/year. Reasonable interest rates combined with solutions to remove obstacles in legal procedures will create new supply, helping the market to recover.
Mr. Nguyen The Diep, Vice President of Hanoi Real Estate Club, also said that recently, the issue of high interest rates has affected the liquidity of the real estate market.
“ Buyers will consider income and expenditure issues and not spend money to buy, causing liquidity to decrease. Meanwhile, real estate businesses are strongly affected by difficulties in the bond channel and high interest rates, ” said Mr. Diep.
According to Mr. Diep, most home buyers have a certain amount of money, the rest will use financial leverage. However, high interest rates make them not dare to borrow to buy. Therefore, purchasing power has seriously decreased, causing businesses to be affected in terms of cash flow.
According to this person, if interest rates are lowered, the real estate market will develop strongly. Because, currently, demand in the market is still very good, especially in the segment serving real needs.
“ The fact that banks are talking about lowering interest rates is good news for the market. However, the implementation depends on the stability of the economic situation and macroeconomic factors ,” Mr. Diep added.
Mr. Michael Kokalari, Chief Economist of VinaCapital, commented that in 2023, the interest rate on 6-12 month deposits will decrease by about 2%, down to 6%, along with 1-2% inflation, which could encourage savers to switch from bank deposits to real estate and stocks.
In addition to reducing real estate loan interest rates, a series of documents have been issued to regulate the market, remove difficulties and help the market warm up.
Most recently, on March 11, Resolution 33 was issued to resolve two major bottlenecks of the market: legal problems and cash flow congestion. Specifically, the Government will support businesses, home buyers, and investors to quickly access credit capital. Along with that, it will extend principal and interest payments, restructure debt groups... for real estate businesses.
In short, according to experts, the removal of a series of bottlenecks is gradually "breaking the ice" of inertia, helping to unblock all segments, the real estate market will therefore soon warm up and possibly explode in 2023.
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