Interest rates for home loans predicted to remain low in 2021 to help boost demand for the property market
Based on a report from securities company VNDirect, interest rates for home loans would remain low next year in hopes to stimulate real estate demand, along with the increase in supply and macro-economic recovery that would encourage development in the housing market, reported Việt Nam News.
The State Bank of Việt Nam (SBV) has cut rates in March, May, and October since the COVID-19 outbreak in January to facilitate people’s interest expenses, ease banks’ provision costs, and allow lenders to launch stimulus packages, with the aim of assisting economic recovery.
As stated by the deputy head of investment analysis at VNDirect Trần Khánh Hiền, the rate for home loans was cut by 1.8 percent to 9.5 percent, the lowest rate in the last 10 years.
Hiền said, “in the context of cooling inflation pressure, we expect the SBV to maintain an adaptive monetary policy in 2021. Although we do not expect further rate cuts, we believe the SBV will not raise rates in 2021 to aid the economy through maintaining loose monetary policies.”
“Thus, the interest rate for home loans will be maintained at low levels in 2021 to stimulate demand for the housing market,” he added.
VNDirect expects the nation’s macro-economic recovery to boost the housing market next year. Investment flow from global production shift would greatly benefit the property market, particularly industrial property.
The report also predicts that new supply to surge, due to the amendments to Law on Construction and the Law on Investment 2020 that will intercept legal bottlenecks. This tackle would set the real estate market into a strong growth period in 2021.
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