Real Estate Back on Track
Hoang Lam (35 years old, Hanoi) has just closed a savings account of 1 billion VND after 1 year and says he will not continue to deposit money in the bank because the deposit interest rate is at its lowest level in many years. As of March 2024, with a 12-month term, more than 30 banks are applying interest rates below 5%, equivalent to or lower than the expected inflation rate of about 4 – 4.5% in 2024.
After researching various opportunities, he decided to switch to investing in real estate when the market is rapidly heating up. The apartment in the project he is living in has increased in price by over 2% in just 1 quarter.
Similarly, Thuy Trang (30 years old, Ho Chi Minh City) is also considering switching investment channels and is currently undecided between gold and real estate to maximize her idle funds. However, after witnessing the fluctuating gold prices in the early days of the year, Trang realized that real estate is still the “good choice”.
In fact, in recent months, the real estate market has been absorbing money again as both transaction volume and real estate tax revenue have improved. In Ho Chi Minh City alone, the tax revenue from real estate transactions increased significantly, reaching 955.3 billion VND, 1.45 times higher than the first 2 months of 2023.
Regarding real estate companies, many have recorded a surge in revenue and profits, establishing the beginning of a new growth cycle. Statistics show that since the third quarter of 2023, out of the 50 largest real estate development companies nationwide, 28 companies (56%) reported a profit growth compared to the same period last year. The fact that more than half of the companies surveyed recorded profit growth is the clearest evidence that the real estate market is “back on track” and actively absorbing funds.
Time to Invest
In addition to attracting investors, the real estate market is also witnessing a large number of transactions from young people and families who want to buy more properties to accumulate assets while interest rates for loans are favorable. At the same time, many practical sales policies have also been launched by reputable developers, stimulating customers to “close deals” before prices soar to new heights.
In Hanoi and Ho Chi Minh City markets, many projects have seen a sharp increase in booking rates, focusing on the apartment segment. There are even projects that sold out on the first day of launch.
The active trading of residential housing segment is largely due to the boost from attractive installment purchase programs that have been introduced to the market for the first time, opening up opportunities for a large number of customers with modest financial resources to own quality living spaces immediately. This is also considered the most optimal choice for buyers as in the context of “short supply” situation with no way out yet, the longer they wait, the higher the purchase price will be.
Vinhomes’ attractive installment purchase policy dominates the market
A noteworthy example of attractive installment purchase policies can be seen from Vinhomes – Vietnam’s leading real estate developer, with the program “Buying Luxury Homes – Financial Peace” launched in February 2024. Accordingly, homebuyers at 3 projects: The Zenpark (Vinhomes Ocean Park 1), Vinhomes Ocean Park 2 townhouses, and The Beverly apartments (Vinhomes Grand Park) only need to pay 30% of the total value to receive the house immediately or to use it for business purposes. The remaining 70% can be borrowed from banks with flexible installment terms for up to 15 years.
It is worth noting that this is the pioneering investor committing to a fixed interest rate throughout the loan period in the market. Accordingly, buyers will be offered a fixed interest rate of only 6 or 7% per year during the first 2 years depending on the low or high-rise products. After 2 years, the interest rate will be market-based, but guaranteed not to exceed 8% and 9.5% for low-rise and high-rise products respectively. If the interest rate of the bank surpasses these rates, the investor will support paying the entire difference.
Regarding the real estate market, many experts believe that 2024 is definitely a bright year after experiencing the worst in 2023. As the market picks up, property prices will begin to rise, and this is a good time to invest.
According to Le Ngoc Tung Vi, Deputy General Director of Marketing, Sen Group, the big boost for the market started from the first quarter of 2024 thanks to the reduced interest rates and the time for the implemented policies to “penetrate” and take effect.
In addition, although effective and in effect from the beginning of 2025, even at this time, the Housing Law 2023, the amended Real Estate Business Law, and especially the amended Land Law have had many positive impacts and are expected to bring new impetus to the market.
“With the government’s support policies and favorable loan interest rates, especially the breakthrough sales policies of reputable developers, real estate has gradually regained its position as the safest and most preferred investment channel,” commented Tung Vi.
Customers only need to prepare 30% of the product value to immediately own a Vinhomes Ocean Park 2 townhouse or The Zen Park – Vinhomes Ocean Park 1 apartment (Hanoi), or The Beverly – Vinhomes Grand Park apartment (Ho Chi Minh City). Vinhomes’ policy helps eliminate all worries about market fluctuations as the fixed interest rate is only from 6% – 9.5% per year, the installment repayment period is up to 15 years, allowing customers to immediately move in or rent out and enjoy convenient living facilities as well as the opportunity to “make money from money” in the most livable urban areas in Vietnam. Please contact the hotline: 1900 2323 89.
