Cash to flow back into real estate
02-05-2012
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Many believed that after four years in the doldrums and several developers going bust, the real estate market has bottomed out.
The Government has taken a series of measures like loosening credit and lowering interest rates, including for property loans.
The State-owned Bank for Investment and Development of Viet Nam has already earmarked loans worth VND4 trillion (US$192.13 million) at 16 per cent per year interest to individuals and households buying housing in projects it funds.
These loans are for up to 15 years and 85 per cent of the value of the property.
Several other banks have also unveiled plans to provide mortgages.
Dong Nam A and An Binh Joint Stock Commercial Banks have announced they will provide personal loans worth VND1 trillion ($48.03 million) for buying, building, and repairing houses.
Military Joint Stock Commercial Bank has signed an agreement with Vingroup Joint Stock Company to lend to people buying a house in the latter's Vincom Village 80 per cent of the value at a mere 10 per cent for the first six months.
Though other banks' interest rates remain high, they are 2 per cent lower than a few months ago.
Phan Thanh Mai, president of the Viet Nam Real Estate Association, said the market was likely to see a revival in the second quarter thanks to the Government's loosening credit policies.
Analysts also said substantial amounts of overseas remittances were being pumped into the real estate market.
According to data from the National Financial Supervision Committee, 52 per cent of last year's remittances of $9 billion was invested in property.
Around VND100 trillion ($4.80 billion) were likely to be invested this year if remittances climbed to $10 billion, they said.
Developers are trying to lure buyers by offering promotions. Hoang Anh Gia Lai Group, for instance, recently announced it would possibly cut prices of apartments in some projects by 50 per cent.
Others accept payments in monthly instalments over several years on which apartment buyers do not have to pay interest either.
