Vietnam Housing Sector Call For Home Loan Rate Cuts
Experts on the property market are proposing interest rate cuts to loans for investing or buying social housing products to 4.5% to 6% per year from 8.2% to 8.7% at present. According to a survey from the Vietnam Real Estate Association, investors and buyers of social housing projects must take loans with high interest rates. Specifically, the interest rate is 8.7% per year for investors and 8.2% for home buyers. These interest rates have made it difficult for investors and buyers. A preferential credit package for social housing projects must meet two important criteria: low interest rates and long-term. The commercial banks’ average interest rate of 8.2% per year for buyers is still too high compared to the financial ability of low-income people. According to several studies, the income of workers is often very low. About 75% of them have to borrow money to pay for their living costs, the Vietnam General Confederation of Labour reported. “With the loan interest rate at 8.2% a year, they cannot buy social housing,” it said. For someone with a stable income of 12 million dong a month, it will take up to 37 years to pay off the loan with a high interest rate. However, if they can borrow at a lower interest rate of 4.5% a year, the payment period will be shortened to about 19 years.
Tags : property market interest rate investing social housing products Vietnam Real Estate Association investors buyers social housing projects