Vietnam Lending Rates for Property Projects Too High: Savills

Lending interest rates of Vietnam’s commercial banks for real estate projects are at the highest level in Asian region and far above the rates in China, Singapore, Malaysia, India and Japan, Savills Vietnam said.

 

“Only 10% of homebuyers have mortgaged their apartments to borrow money from commercial banks; the lending rates of around 20%/annum for realty projects are too high,” the market researcher said in a report.

 

Troy Griffiths, country director of Savills Vietnam, said the country’s real estate market gives investors signs for confidence in the coming year.

 

He said, although the market may be sluggish during the first half of 2011, much will depend on the results of the National Assembly’s parliamentary elections on May 22.

 

Signs for optimism, he says, are rapid urbanization and a young population, as well as a growing middle class with the ability to buy houses and disposable income.

 

Savills said this year will see increased development in commercial real estate, largely because of the growth in the retail sector, which has seen new development of distribution and delivery systems. There is also an increased demand for goods and services, Griffiths said.

 

He added that Vietnam should actively compete with other Southeast Asian countries to attract more investors to the property market. (Pioneer)