Pham Hong Hai, CEO of HSBC Vietnam Limited, weighs over customers’ top choices in Vietnam’s real estate market in 2019 and how the bank could support homebuyers to realise their life-time housing dream.

HSBC CEO Pham Hong Hai

How would you assess the Vietnamese real estate market and people’s demand over the course of 2019?

Last year was a successful one for the Vietnamese real estate market as the market was basically stable, and the diverse market segments were more proportionally structured. The market had undergone strict supervision; investment flows as well as development policies had become more apparent, putting the market in good shape. Notably, the government has introduced guidance regulating apartment blocks’ operation and management.

This trend is forecast to prevail this year, attached to the government’s target of reaching 6.6-6.8 per cent GDP growth this year and keeping inflation well below 4 per cent. Side-by-side this is the central bank’s (SBV) monetary policy with an estimated credit growth target of 14 per cent.

In the wake of the ongoing exodus of people of working age from rural areas to production factories in urban centres, the demand for low-cost and medium-range housing will be steadily on the rise.

In addition, luxury condos will continue drawing special attention from foreign investors thanks to a softer price factor compared to some regional markets. As the economy could still maintain its growth momentum, the real estate market is forecast to be in a stable mood with the flexible execution of diverse market control tools such as tax and credit policies, land use plans, and investment project proposals.

Low-cost and medium-range apartments are forecast to lead customer choice this year with great demand from customers. This is also the leading market segment with anticipated high and stable liquidity.

In the face of the recent robust economic growth, quick urbanisastion, and fast-growing demand for comfortable life and civilized living space, the condo model has become the top choice among homebuyers in big metropolises in Vietnam.

life and civilized living space, the condo model has become the top choice among homebuyers in big metropolises in Vietnam.

How do you perceive interest rates for house purchases in 2019?

The National Financial Supervisory Commission’s figures show that the interest rate for homebuyers averaged at 8.91 per cent last year, a bit more than the 8.86 per cent in 2017. The CPI rose by 2.64 per cent in the first two months of 2019. The possible power price hike later this month would cast remarkable impacts on the inflation in the subsequent months this year.

Banks’ deposit rates tend to go up in recent months, particularly those on longer-term deposits. On that basis, interest rates for homebuyers might increase slightly compared to 2018.

What support policies does HSBC offer homebuyers?

HSBC Vietnam is always consistent in aligning its credit growth target with customers’ practical demands, developing diverse lending products to feed homebuyers’ needs.

This year, our target customer groups will continue to be young couples or singles with decent income. The customers will be offered competitive lending rates starting from a stable 6.99 per cent per year for five years, with lending value up to 70 per cent of the asset value, for a duration of 25 years.

In addition, customers might opt for another term of fixed interest rate after the first term, allowing them to get hold of their financial plans.

In the face of the recent robust economic growth, quick urbanisastion, and fast-growing demand for comfortable life and civilized living space, the condo model has become the top choice among homebuyers in big metropolises in Vietnam. This is also our target segment.

In respect to credit policies and products, HSBC Vietnam will constantly improve our products, further simplifying lending processes and procedures to bring customers the best experiences with our products, besides lowering operational costs to offer customers the most competitive interest levels.

Our bank will increasingly communicate with the customers seeking to borrow through customer surveys or project launching of developers having relations with HSBC, helping the customers get updates about our lending policy and new real estate projects.

VIR