Vietnam real estate sector needs lower interest rates, industry group says

27/04/2012 13:30

The real estate market will continue to face difficulties this year, the Ho Chi Minh City Real Estate Association said.
The Ho Chi Minh City Real Estate Association has called for new measures from the government to help revive the sector, including lowering lending interest rates to 14-16 percent.

Property prices in the country are too high compared to those in regional countries and need to be reduced, the association wrote in a new proposal sent to the government, the Ministry of Finance, the Ministry of Construction and the State Bank of Vietnam.

Lower lending rates will allow the economy and the sector to grow normally and steadily, the association said. It is not fair that banks charge higher rates on loans immediately after deposit rates increase, but then delay cutting lending rates after input costs fall, the association said.

The State Bank of Vietnam cut the refinancing rate by 1 percentage point to 13 percent last week, while lowering the discount rate by the same amount to 11 percent. It also lowered the dong deposit cap for terms of one month and above to 12 percent from 13 percent.

Following the cuts, the central bank said several lenders have cut lending rates for exporters and low-income homebuyers to 13.5-16 percent. At some other banks, home loans are still offered at around 20 percent.

The Ho Chi Minh City Real Estate Association said the government also needs to review a regulation that requires housing developers to compensate relocated residents and then pay for land use rights again. This causes real estate prices to remain high, it said.

The association said the real estate market will continue to face difficulties this year as market liquidity is weak while housing stock is now large.

Rol.vn - Source: Thanh Nien News



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