Real estate prices are rising rapidly, banks are tightening real estate loans
Interest rates for loans to buy, build, and repair houses are increasing. Banks are also gradually tightening preferential loan conditions, so borrowers are also discouraged by high interest rates.
The State Bank of Ho Chi Minh City said that many banks are tightening investment loans in areas experiencing a strong land fever such as Can Gio, Cu Chi, Hoc Mon districts, District 9 (Ho Chi Minh City)...
Increase interest rates, tighten incentives
Needing to borrow 1 billion VND to buy land, Ms. Hien (Go Vap District, Ho Chi Minh City) went to BIDV branch in Go Vap to ask for a loan.
The bank staff said there were two options. If you choose a preferential loan, the longer the fixed interest rate period, the higher the interest rate.
Specifically, if you want to fix it for 12 months, the interest rate is 7.8%/year; if you want to fix it for 24 months, the interest rate jumps to 8.8%/year.
After this period, the loan interest rate will be equal to the 24-month term interest rate plus a margin of 3.5%/year (currently calculated at about 10.7%/year).
It is worth mentioning that if you borrow under the preferential program, the bank will only consider lending 50% of your needs. The remaining amount you have to borrow under the regular program with an interest rate of 10.7%/year.
 |
In addition, depending on the fixed interest rate period, the bank also binds the borrower not to pay early (within a certain period of time).
If there is a violation, in addition to being fined, the bank will recalculate the interest rate during the preferential period. "Previously, when I borrowed preferential programs, the bank would apply it to the entire loan, not just half of it," said Ms. Hien.
According to a survey, some large banks are currently applying flexible interest rates, ranging from 8-9%/year and fixed for a long period of time, but are also gradually tightening preferential conditions.
Some joint stock banks apply quite high interest rates for loans to buy land, buy houses, and repair houses, some banks up to 12%/year if customers borrow medium term.
In case of long-term loans, the interest rate at the time of disbursement is up to 12.5%/year. Compared to before, the interest rate for loans to buy, build, and repair houses at joint stock banks has increased by about 2%/year.
Besides, due to the recent sharp increase in real estate prices, banks have also re-evaluated prices and only lend up to 70% of the value.
Mr. Nguyen Hoang Minh, deputy director of the State Bank of Vietnam, Ho Chi Minh City branch, said that recently there have been many documents warning banks about investing in the real estate sector.
Mr. Minh said that banks have now warned of more risks, especially in areas where land prices are pushed up abnormally such as Can Gio, Cu Chi, Hoc Mon districts, District 9...
Accordingly, banks, in addition to carefully surveying land prices, even reduce lending rates to low levels, around 50%, even 30% compared to market prices.
Talk toYouthMr. Vo Tan Hoang Van, General Director of SCB, also confirmed this.
According to Mr. Van, in areas where land prices are pushed up abnormally high, such as the above areas, banks do not accept mortgages using real estate formed from loans. Borrowers must mortgage real estate in the central area.
Borrowers rush to divest
With the new move from the bank, many investors have had to recalculate. Mr. ND, a real estate investor in Thu Duc district, said that 70% of his capital for real estate investment was borrowed from the bank. Because of his good debt repayment history, many places even offered him loans.
Through acquaintances, Mr. D. was given a loan package of 1 billion VND/person by a bank branch based in Thu Duc, with an interest rate of 9.5%/year. In addition to taking out the loan in his own name, Mr. D. also asked his family members to take out the loan in their own name to buy many houses.
About two months ago, the bank announced that the interest rate would increase to 12%/year. Fearing that the interest rate would continue to increase, Mr. D. is also looking for customers to sell some of his land.
"Investors rely on bank capital, but now that it's tightened, no one dares to borrow a lot to buy like before," said Mr. D.
 |
Mr. PVT, an investor in District 1, said that usually, for a real estate project with complete documents, the bank will lend up to 70% of the value of the real estate. However, currently, some investors have begun to limit bank loans to invest in real estate because prices have increased too much and banks are tightening loans.
"Investors who borrow are also afraid of high interest rates, delayed sales, and unsold goods, which can easily lead to bankruptcy," Mr. T. shared.
Will housing prices fall?
Mr. Phan Cong Chanh, knowledgeable about real estate, said that among the sources of capital for real estate investment, bank loans are the main channel.
"Tightening lending conditions may slow down the increase in real estate prices. However, the market has now established a new price level, so it will be very difficult for prices to return to the previous level," said Mr. Chanh.
According to Mr. Nguyen Xuan Loc - General Director of Techcomreal Real Estate Company, when real estate is "hot", advising banks to tighten capital loans for real estate is a timely move to rebalance the market.
Investors will be cautious when borrowing capital to invest in real estate, thereby helping to "cool down" the current abnormal price increase.
"With the current market situation, it is very difficult for bank credit officers to verify which areas have virtual price increases and which areas have real prices. If banks disburse massively, in case the market freezes, it will have a huge impact," said Mr. Loc.
