Week 27/2020 – Central Vietnam Real Estate News Summary
In this weekly and sometimes bi-weekly news flash – CVR: Central Vietnam Realty will provide a choice of articles from mainly Vietnamese media sources related to real estate market in Vietnam.
We will be focusing on issues related to Da Nang and Hoi An, while also looking at national news and their possible impact for Central Vietnam’s property market.
You will find a summary, link to the source as well as CVR’s take on the article.
We believe that local knowledge is the key to making the best possible decision and that’s what we offer to all our clients.
“CVR: Western Management – Local Knowledge”
1. In an article titled “Vietcombank, BIDV, TPBank, … simultaneously reduced the interest rates for home loans in July” the author, Ha Nhung, starts by confirming that, banks continued to implement many home loan packages with attractive preferential interest rates in July 2020. Notably several big banks including BIDV, TPBank, and Vietcombank simultaneously lowered the interest rate for home loans.
Specifically, BIDV reduced the interest rate for home loans from 8% to 7.8% for 12-month preferential loans and from 9% to 8.8% for 24-month preferential loans. The preferential interest rate of BIDV remains at 10.1% / year.
TPBank also reduced interest rates from 10.5% to 9.5% for 12-month preferential loan packages. The preferential interest rate of TPBank is around 11.6 -12% / year. For VinGroup, Sungroup and projects with interest rate support from investors, TPBank’s interest rate policy will be applied separately to each project.
As one of the largest commercial banks in Vietnam with more than 100 branches across the country, Vietcombank also moves to lower interest rates for home loans from 8.1% to 7.7% for 12-month preferential loan packages.
Contributing to the list of banks that reduced interest rates in July, there are 2 foreign banks, Hong Leong Bank and Woori Bank. In particular, Hong Leong Bank reduced interest rates from 8.5% to 8.0% for 24-month preferential loans, while Woori Bank decreased from 8% to 7% for 12-month preferential loan packages.
The advice from the article, with which CVR’s team generally agrees, is that reduced interest rates would reduce financial pressure on home borrowers for a relatively long time.
2. The title of the next article is quite self-explanatory: “Why is low-cost commercial housing scarce?”
In this article, author Minh Hữu talks about the fact that low-cost commercial housing is scarce and the reasons why. First of all, the current law has not specified the minimum or maximum price for an apartment. The investor sets the sale price based on an agreement between the investor and buyer. Therefore, apartment prices are arbitrarily pushed by investors. Secondly, there are no specific Ministry of Construction policies regulating housing type (and therefore affordability) to balance the real estate market.
CVR believes this is imperative information for citizens to recognize why low-cost commercial houses are scarce so they can make recommendations to authorities who can make policy decisions that will help stabilize the real market estate.
3. The next article we find attention worthy, written by Anh Duong, talks about “Green real estate property to be the potential investment channel in the long run”
In this article, the author points out that smart ecological real estate projects promoting and optimizing the natural living space are a new trend to attract residential buyers and investors with attractive profit potential. With the optimistic forecast on Vietnam’s economy, experts trust that investors will rely on investment into green real estate.
The need for a green, healthy lifestyle is on the rise, especially after the Covid-19 pandemic. Smart eco-urban development is a popular trend in the world and this wave is starting to spread in Vietnam.
Nowadays, many people choose to live in the city center with limited space which affects their health and work. At CVR we believe that a green lifestyle is a need and demand that developers must meet in order to sell their product.
In Da Nang, eco-green projects such as Eco-Charm, Lakeside Infinity, and the most recent Rosa Riverside Complex provide adequate living space for residents. These land projects have the potential to be green city for urban areas of Da Nang in the near future.
4. Hoang Thuy and Viet Tuan of Vnexpress write in a piece titled: “Da Nang proposes to solve problems of many real estate projects”
According to the Chairman of Da Nang, Mr. Huynh Duc Tho, if procedural problems are not removed (such as taking back Chi Lang Stadium, Da Phuoc Urban Area, …), there will be a big bottleneck in exploiting major projects, generating revenues, and promoting socio-economic development of the City.
Many transport projects have been proposed by Da Nang to the VN Government for approval such as the construction of Lien Chieu Port, upgrading Da Nang airport, and upgrading and expanding national highway 14B connecting Da Nang with Quang Nam.
CVR believes that the Danang government is working hard to create a healthier investment environment by upgrading the city’s infrastructure to catch the new wave of investment after the COVID epidemic.
5. An interesting article by Tuong Minh, titled: “Only 50% of tourist accommodations reopen after Covid 19” has been published on a Laodong.vn portal.
As the author points out, Da Nang has more than 1000 vacation accommodation businesses. However, after the pandemic, only half of them are back to business.
In the first 6 months of 2020, there were 1.5 million tourists traveling to Da Nang and the revenue was 6000 billion VND. This dropped down more than 60% compared to the same period last year, affecting 23.000 employees in the industry.
This breakdown shows the strong effect of Covid 19 on tourism businesses. The channel to access clients has changed from traditional methods to online and E-commerce, and programs to boost up the tourism industry and training courses to improve service quality have opened up to employees.
CVR property experts point out that this gives us a practical point of view about the situation, the consequences of the pandemic, and the quick actions of businesses and the Da Nang government to overcome this difficult period of time.
6. The last piece of news worth mentioning for the week questions: Which legal principle of land investment investors need to follow?
The legal documents are one of the most important factors in purchasing real estate. In fact, without understanding the legal aspects of a real estate transaction, buyers may fall into a loss. In order to become a wise investor, a buyer needs to understand the following legal provisions:
- Conditions and time of land transfer in the project
- Conditions and time for capital mobilization of the project
- Conditions and time to sell houses formed in the future of the project
For more detail, please contact CVR today!
CVR helps clients and investors have a good understanding about the legal aspects of the projects they intend to purchase.
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