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Bank interest rates dropping, real estate market rising   2009-02-11 - VietNamNet/PL TP HCM

The real estate market has become rapidly warmer in the last two weeks since the market restarted after the Lunar New Year holiday. A lot of real estate developers have begun launching products onto the market, while banks have been approving more loans.


Commodities for sale


Clients seeking information about the project on apartments and trade centres in Thu Dau Mot town in the southern province of Binh Duong

Real estate developers have bravely begun marketing products after a long time of avoiding active service. ThuDuc House has said that it is going to put 262 apartments in the Truong Tho project up for sale later this week. These carry the minimum price of $1,000/sq m.


Similarly, Sacomreal is planning to offer 200 high grade apartments in district 2, HCM City. Prior to that, Phu My Hung and Tan Binh Real Estate Company attracted a lot of buyers with their apartments.


Brokers said that real estate transactions have become increasing unpredictable since Tet. Lam Van Chuc, General Director of Phuc Duc Real Estate Corporation, said that the number of clients making purchases through his company’s network has increased by three-fold over last week.


According to Luong Tri Thin, General Director of Green Land Company, some 200 visitors have come to his office every day for the last five days to seek information about real estate prices in the My Phuoc urban area in Binh Duong province.


“I am really surprised to see people returning to the real estate market so soon,” Thin said.


Real estate brokerage offices on Tran Nao road in district 2, Hoang Dieu in district 4 and Le Van Luong in district 7 have also confirmed that a lot of people have approached them since Tet looking to purchase land and houses.


Purchase houses? Wait until Q2


Explaining why the real estate market has been attracting people in the first days of the Lunar New Year, Nguyen Vu Bao Hoang, Business Director of ThuDuc House, said that it is because bank interest rates have decreased sharply.


“The low interest rates make depositing unprofitable at this moment. Meanwhile, investors do not think of injecting money in stocks as the market remains very gloomy. Making investment in real estate now proves to be the best choice,” Hoang said.


Xuan Tung, who lives in district 3, HCM City, said that if he deposited VND300mil at a bank, he would get only VND21mil a year (interest rate of 7% per annum). Therefore, Tung thinks that it would be better for him to borrow some more money from relatives to buy a 70 sq m apartment in the suburbs.


Meanwhile, Luong Tri Thin from Green Land said that the real estate market has become more attractive as prices have become surprisingly cheap.


However, Nguyen Ngoc Duong, a real estate expert, Chairman of Viet Five Stars Company, has advised people to be cautious when purchasing land and houses, and be wary about misinformation.


“The market has really become warmer with more people seeking information, though the number of transactions remains very modest,” Duong said.


He went on to say that most people will wait until the end of Q2 to know for sure if the market really is warming up.


Le Hoang Chau, Chairman of the HCM City Real Estate Association, also affirms that it is too early to say the market has warmed up.

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