According to the Vietnam Association of Realtors (VARS) on April 21, several investors have begun construction and sales of a series of real estate projects as of mid-April 2024. Several projects with notable progress have officially received deposits from customers.
Absorption rates for new apartments have improved in recent times. (Photo: Dai Viet)
According to VARS, during the first quarter of 2024, the housing segment welcomed around 20,500 products offered for sale. This included over 4,300 entirely new products. Transactions in the housing segment continued to increase with 6,200 transactions, which is an 8% increase compared to the fourth quarter of 2023 and double the number from the same period last year.
In the apartment segment alone, VARS recorded over 3,000 new apartments available in the market with an absorption rate of 57%. This indicates that for every 100 new apartments, 57 were sold.
Nguyen Van Dinh, the Chairman of VARS, stated that interest rates for loans have fallen to their lowest in 20 years. With the economy entering a recovery phase, this presents an opportunity not only for businesses to develop projects, but also for individuals to purchase homes more easily.
He believes that even though many remain apprehensive about floating interest rates after the preferential period, floating mortgage interest rates currently remain at around 9-11% per year, marking a 4% decrease compared to previous interest rates.
In addition, many banks have partnered with investors to introduce policies that establish a maximum interest rate cap, thereby protecting homebuyers from risks associated with floating interest rates.
“Loan interest rates are holding steady, including those for home loans, with loan terms extended to 25-30 years, reducing the monthly repayment burden for borrowers. Additionally, banks are actively working to reduce costs in order to lower interest rates, in line with the direction from the State Bank. This presents a highly favorable condition for the real estate market to recover”, said Mr. Dinh.
VARS experts predict that overall loan interest rates will continue to decrease in the coming period.
Regarding investment demand, after a period of cautious observation of market developments, individuals and investors have begun to show renewed interest in the real estate market. However, investor “risk appetite” has changed after lessons learned from previous experiences.
VARS recommends that this is an opportune moment for individuals and investors to “step into” the real estate market and take advantage of low interest rates and favorable sales policies offered by businesses. However, individuals and investors must ensure that they do not overextend themselves financially through excessive use of leverage.
