The Government’ tightening of policies has created a capital shortfall, which has caused difficulties for both businesses and home buyers, as well as opened up a gap that usurers have been quick to take advantage of.
Lenders take advantage of real estate buyers
Ms. L.C, who works in Hanoi and is giving birth to her second child, said her family is in desperate need of a house.
With the help of a real estate agency, she found a 40-square-metre apartment in Tan Mai area worth VND1.2 billion (USD58,055).
The real-estate agency promised to provide her with financing, but at daily interest rate of VND4,000 (USD0.19) on every VND1 million (USD48.3). This equals to a yearly interest rate of 144%. In addition, she had to sign over ownership of the house until all debts were cleared. Not surprisingly the exorbitant interest rates eventually caused problems for the family.
In a rush to buy the home, she persuaded her husband to sign for the loan. Three months later, however, the family found it difficult to afford the exorbitant interest. Being left with no other choice, her parents were forced to sell the land they owned in Ha Tinh Province in order to pay off the home.
According to many reports, the same situation is occurring at other real estate offices all over Hanoi.
