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Since January 2024 until now, not only deposit interest rates but also lending rates have continued to decrease. The latest statistics from the State Bank of Vietnam on interest rates show that the new average deposit interest rate is about 3.9% per annum; the new average lending interest rate is about 6.7% per annum. This interest rate level is lower than both pre-COVID-19 deposit and lending interest rates. For example, at Vietnam International Bank (VIB), individual customers applying for mortgage loans at this time can enjoy interest rates from only 6.5 – 7% per annum.
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Meanwhile, many people with idle money are struggling to find investment channels. Mr. Hoang Ha (living in Binh Thanh District, HCMC) said that his relatives have just repaid him a loan of VND 2 billion and he is considering between savings and investment channels.
“I prioritize investment and have been exploring options to borrow more from banks to buy apartments for rent or buy houses in suburban areas for potential price appreciation. The low interest rate is the key factor for me to decide to borrow more for real estate investment at this time,” said Mr. Ha.
In a recently published real estate sector update report, analysts at Maybank Securities noted that the key factors that have exerted pressure on the real estate market since 2018 (peaked in the crisis of 2022), including interest rates, liquidity (bond market), and the legal framework have seen significant improvement, especially in lending interest rates.
Maybank securities analysts expect that the decline in lending interest rates will benefit both businesses and homebuyers. The regulations allowing bond restructuring will help reduce liquidity pressure for businesses in the next two years. Most importantly, the expected new laws on land, housing, and real estate business are expected to address regulatory barriers and create favorable conditions for project development from the end of this year, contributing to a transparent and sustainable real estate market in the long term.
The Ministry of Construction also stated in a recent real estate market report that since the fourth quarter of 2023, the Government and the State Bank have been determined to implement a series of synchronized solutions to remove difficulties and increase the credit absorption capacity of the economy.
The real estate market is expected to quickly recover, with interest rates reaching the lowest level in about 20 years. Therefore, to stimulate credit demand from the beginning of the year, some banks are not afraid to “play big” by offering a series of competitive incentives in the real estate lending market, especially in the segment for investment or real estate accumulation.
For example, Vietnam International Bank (VIB) offers individual customers mortgage loans at preferential interest rates of only 6.5 – 7% per annum; fixed interest rate term options up to 36 months. For customers who are concerned about their finances in the early stage, the bank is implementing a preferential grace period with no principal repayment for the first 24 months. For customers who want to accumulate real estate but plan to pay off the loan in the short term, VIB offers a package with interest-free early loan settlement after 06 months of disbursement. For customers who still have real estate loans at other banks, they can reduce financial pressure by refinancing with preferential interest rates of 0% for the first month, and from the second month, the interest rate is only 6.5% per annum when transferring mortgage loans to VIB.
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It can be said that attractive interest rate policies and dedicated mortgage products such as those offered by VIB specifically and other banks in general will help boost the attractiveness of real estate investment channels in 2024.
