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Interest rates have dropped sharply, but people still prefer saving to investing in real estate.

Công LuậnCông Luận13/12/2023


Interest rates have dropped sharply, but people still prefer saving to investing in real estate.

In the past two years, savings interest rates have dropped quite a bit, but people's deposits in banks are still increasing strongly.

According to a report by batdongsan.com.vn, in the first 9 months of 2021, residential deposit growth increased by only 2.92%, but in the first 9 months of 2023, residential deposit growth increased by 9.95%.

Meanwhile, a survey of real estate brokers in the fourth quarter of 2023 by Batdongsan.com.vn showed that 43% of surveyed brokers said that market transactions were still falling sharply. This figure was 46% in the third quarter of 2023, 44% in the second quarter of 2023, and 54% in the first quarter of 2023.

Interest rates are falling sharply, people are saving more money than investing in real estate. Image 1

People's money is still pouring into bank savings instead of buying real estate. (Photo: DMO)

Pre-tax profits of some listed real estate businesses also decreased sharply, ranging from 5 to 97%.

The decline in the capital market is reflected in the sharp decline in the amount of corporate bonds issued. As of October 11, only over 50 trillion VND of bonds were issued, while in 2021, the amount of corporate bonds issued to the market was nearly 300 trillion VND.

"This shows that consumer confidence in the real estate market has not been strongly restored, people still choose to save money in banks to preserve their assets. That is why the transaction volume and business activities have not improved," said Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn.

Meanwhile, Mr. Le Dinh Chung, General Director of SGO Homes, commented: The current real estate market is repeating the cycle of 2011 - 2014. Accordingly, the real estate market officially showed signs of decline in June 2022 and completely "stagnated" by September.

“We are a distributor but we are almost unable to react to market developments. The market collapsed so quickly that it was almost impossible for businesses to resist,” Mr. Chung shared.

According to SGO Homes' report, in the first 9 months of 2023, the resort real estate market was almost completely paralyzed and there were only a few transactions near Hanoi . The land market is not much better as it is still in a state of deep losses and very low liquidity.

In the past 3 months, the real estate market has started to have transactions again, but mainly around 1 billion VND in value and at auction.

Some bright spots in the market

However, according to a report by batdongsan.com.vn, the market is still recording positive bright spots when public investment disbursement as of November 2023 reached 65.1%, while in the same period last year, public investment disbursement only reached 58.3%.

Along with that, the two draft laws related to the real estate market, the Housing Law and the Real Estate Business Law, were passed, also creating positive impacts on the real estate market.

Interest rates are falling sharply, people are saving more money than investing in real estate.

Vietnam's real estate market is experiencing and will experience a number of trends. (Photo: RT)

Mr. Nguyen Quoc Anh said that the Vietnamese real estate market is and will have some trends. On the buyer side, they will be more demanding in terms of quality and legality of real estate projects.

Therefore, investors need to convince customers with the core value of the product, clear legal status, sustainable finance, reputation and prestige. In addition, home buyers and real estate investors use more data to make decisions.

Batdongsan.com.vn predicts that products serving real housing needs such as apartments and private houses will be prioritized in investors' portfolios, because they can create regular cash flow and maintain stable prices.

Notably, real estate experts said that new points in the Law on Real Estate Business (amended) and the Law on Housing (amended) will impact the real estate market.

One of the regulations that many market participants are concerned about is the tightening of land subdivision. In the coming time, the demand for land will decrease quite sharply, due to buyers' fear of legal risks.

Land prices will also be adjusted down, especially for large plots. However, in the long term, land prices may continue to increase and transactions will resume.



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