Interest rates down but house prices still high
In recent months, banks have continuously adjusted their savings interest rates. In addition, home loan interest rates have also been adjusted down sharply by many banks since last October.
With a need to borrow 900 million VND to buy a house, Mr. Nguyen Duc Tung (Hai Ba Trung, Hanoi ) was advised by an employee of a joint stock commercial bank on many preferential loan packages. Accordingly, the loan interest rate of 6.9%/year is applied preferentially in the first 6 months, customers receiving preferential treatment in the first 12 months of the loan will be subject to a loan interest rate of 8%/year. In addition, customers can choose a fixed interest rate of 9%/year for the first 24 months of the loan.
According to Mr. Tung, the interest rate for home loans has decreased a lot compared to the end of 2022. However, the thing that he hesitated the most when deciding to buy was that the current house price is still high.
"The house I intend to buy has an area of 30 square meters, has been built with 4 floors, the alley in front of the house is not accessible to cars, in Vinh Hung neighborhood, Hoang Mai district is being advertised for sale at 3.6 billion VND, equivalent to 120 million VND/m2. This price has not decreased, but has increased compared to 2022", said Mr. Tung.
Housing prices are far higher than urban residents' incomes (Illustration: Ha Phong).
According to Mr. Vu Duc Hung - owner of a brokerage office in the western part of Hanoi, currently the primary selling price of apartments in this area is mostly high-end, high-priced segments. The number of affordable and mid-range apartments in the secondary market is small, thus pushing up the prices of the two segments.
Similarly, the villa and townhouse segments in Nam Tu Liem district and Hoai Duc and Dan Phuong districts all have high prices. The number of products cutting losses at the present time is not much, most of which have happened to homeowners facing financial pressure due to high loan interest rates at the end of 2022 and the beginning of this year.
"Currently, the price of townhouses in An Khanh area (Hoai Duc) is still maintained at 90-110 million VND/m2, depending on location and area. This price is not cheaper than the "land fever" period in 2021 and early 2022," said Mr. Hung.
To clear liquidity in the market, many experts believe that the demand for real estate has been showing positive changes in recent months. However, the actual down payment rate is low, mostly because investors have not yet "finalized" the time to put down money to "win".
In addition, the difficult economy and the complicated developments of the global financial situation are causing many investors to consider and choose cautious steps, not recklessly using financial leverage to buy real estate as before. For investors with available cash flow, the belief that housing prices will fall sharply and the need to force prices down to the same level as before the "land fever" has made them not rush to "put down money" immediately.
Real estate supply is still mainly in the expensive segment.
Information about the real estate market at the recent Credit Conference for Real Estate and Housing Development, Mr. Hoang Hai - Director of the Department of Housing Development and Real Estate Market ( Ministry of Construction ) said - in the first 3 quarters of this year, the real estate supply has shown a clear downward trend.
According to Mr. Hai, the number of completed commercial housing projects nationwide has tended to decrease recently, the segment of townhouses, villas, and adjacent houses has increased but the number is not much. The structure of housing products is still unreasonable, there is an excess of products, high-end segment while there is a lack of affordable housing, especially housing for workers, social housing. Housing is priced suitable for the ability to pay of low-income people in urban areas.
Notably, the real estate transaction rate is still down sharply compared to recent years, about more than 50% compared to the same period in 2021 and 2022, especially in the residential real estate segment.
Real estate supply is mainly concentrated in expensive segments (Illustration photo: Ha Phong).
Sharing about how to reduce house prices, according to Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association (HoREA) - people with real needs are always ready to "pay" to buy a house, regardless of whether the State or the bank has support policies or not. Therefore, the problem here is how to make the house price reasonable.
According to Mr. Chau, the current market is in dire need of social housing and affordable commercial housing. However, most of the current housing projects are in the mid- and high-end segments, from 30 million VND/m2 and up.
"The government must shorten administrative procedures, because the longer the procedures, the higher the construction costs. The costs are included in the price. Therefore, the shorter the administrative procedures, the more we hope to reduce housing prices for people," Mr. Chau emphasized.
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