Week 19/2020 – Central Vietnam Real Estate News Summary
In this weekly or 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 “Scenarios of real estate recovery from the view of the Chinese market”, the author mentions about how the Chinese real estate market is recovering from the pandemic.
Office buildings slowly filling back up, shopping malls are gradually returning to operation, with preventive measures such as checking temperature and safe distance being implemented. As fresh food delivery is getting more and more popular, the author expects this will boost the demand for cold storage. Health-related applications for buildings are also a big concern for everyone going forward, such as body temperature cameras and digital control systems.
As China was the first country to deal with COVID-19, we can follow their procedures and analyze the positive and negative effects of their recovery methods. This analysis can then be used to assist in the recovery of Vietnam’s economy in general and Da Nang’s in particular. While Da Nang is still affected by the pandemic, the Da Nang market is still quite stable and no heavy market disruption is recorded so far. Da Nang, and Vietnam as a whole, is poised to be one of the first to recover after COVID-19.
2. Title of the next article is quite self-explanatory: “In May 2020, some banks continued to reduce interest rates for home loans”
This month, Vietnamese banks have introduced a series of home loan packages with attractive preferential interest rates. Most notably, some banks continued to reduce their lending rates to for first time home buyers.
Specifically, Techcombank reduced the interest rate for home loans from 7.99% to 7.89% for 6-month preferential loans and reduced interest rates from 8.79% to 8.29% for preferential loans, 12 months treatment. The bank’s preferential interest rate remains at 11.5%.
One more example, TPBank reduced the preferential interest rate from 6.9% to 5% for the 3-month preferential loan package. The interest rate after the offer is stable with a margin of only 1.5% / year (applied from the 4th to the 12th month) and 3.7% (applied from the 13th month onwards). The minimum loan period is 48 months.
In general, from April 2020 to now, many banks have tended to reduce interest rates for home loans to promote home sales and encourage buyers. This is considered a stimulus to attract customers because in the context of prolonged epidemics, the majority of people tend to focus on spending on basic necessities for life and limiting the purchase of property or investment.
CVR believes in getting the best deal possible for our clients and these attractive mortgage rates are another aspect that should be paid attention to. Buyers can consider and decide to buy the property quicker and pay less monthly interest, especially when there will be more and more projects in Da Nang for lower-budget clients
3. Another interesting article by Ha Vy titled: “Surfing real estate investing is set, cash flow into real estate with high safety.”
As the author points out, real estate experienced the “wave” of Covid-19, and it seemed that the surfers have had a very difficult time. In the current period, short-term investment opportunities are more difficult given reduced liquidity and decreased cash flows, while long-term investors with strong financial capacity have more options to choose high quality products now and wait for the market to recover.
We believe the decision to buy real estate depends on many factors. Of course, the first important factor is financial resources available! Real estate is a high-value product, so customers often have to use financial leverage to buy houses and land.
4. Next article we find attention worthy, which is “Looking for investment opportunity after the Covid-19 pandemic”
The author discusses the opportunities post-COVID for investors when the market comes back to its previous market value. The article also highlights the residential real estate segment in the price range 2-3 billion VND, as it is likely the segment to show the quickest price recovery after COVID.
CVR property experts point out that there are not many transactions within the extreme luxury segment at this time. The investors currently prefer land ranging from 1-1.5 billion and apartments around 2 billion.
5 .An author of Hanoimoi writes in a piece titled: “Canceling the separation of passengers on transportation means from May 7th”.
The article gives informs us that on May 6, the Ministry of Transport issued an urgent letter requesting the Vietnam General Department of Roads to cancel all regulations on passenger spacing on all means of transport (buses, taxi, cars, trains, airplanes, ships…). Flights on the routes Ha Noi, HCMC, Da Nang will also be begin operating normally, applied from 0h on May 7.
Soon enough domestic tourists, visitors and investors in Vietnam will be able to freely come to Da Nang for summer holidays and for business reasons. Great news for the Da Nang hospitality segment as normality seems to be returning across Vietnam!
6. The last piece of news worth mentioning for the week: Da Nang required two golden-glass buildings to be fixed.
There are two new projects, including SHB buildings on Nguyen Van Linh Street and Risemount Apartment on Nhu Nguyet Street, Hai Chau district, which did not follow the construction plans as approved by the Da Nang Construction Department. Initial approval was for blue windows, though investors of the building switched to gold without approval. The gold window panes cause intense glare to the neighboring buildings and traffic passing by the buildings.
At CVR, we believe it is good to see the local governments taking a stance against unlawful building in the interest and protection of the people of Da Nang.
As always, CVR is at your service and happy to provide help anyways we can!