Ha bought a villa worth VND12 billion (US$508,500) from Novaland using cash and a VND5-billion bank loan after Vietnam’s fourth-biggest property developer pledged to cover most of the interest.
But now Ha doesn’t know how she’s going to pay because the company has reneged on its commitment.
In late 2021, Ha bought her villa at the Aqua City project, which is still under construction in Bien Hoa, the capital town of Dong Nai Province.
At that time, Novaland had pledged to cover an annual interest rate of 9% for 24 months, leaving Ha little to pay to the bank.
But early this year, Novaland suddenly announced it would stop assisting customers with their interest payments, effectively asking Ha to pay all the interest.
The developer has said it would refund her and other buyers the money later when they receive their properties’ ownership certificates.
“I don’t know when I will receive the refund because the project has been delayed, and I don’t have enough money to pay interest,” she said, noting that construction of her unfinished villa has been halted since December 2022.
“I really want to liquidate the contract to get my money back, even though I know I will be fined, but Novaland said they don’t have money to pay me back.”
According to real estate expert Nguyen Quynh Anh, such a fine is often equivalent to 20-30% of the contract’s value, sometimes even higher.
And in the current economic climate, it would be difficult for Ha to resell the villa at a lower price because market liquidity is low, and her loan is becoming a bad debt.
“Stopping the interest rate assistance has put me in a deadlock situation,” Ha bemoaned.
Nguyen, a resident of HCMC’s Thu Duc City, said she is now “sitting on fire” after Novaland announced it would stop helping her pay interest this month.
She bought a villa at the Novaworld Phan Thiet project in the central province of Binh Thuan at a price of nearly VND14 billion.
Some 60% of the cost came from a bank loan with an annual interest rate of 12%. With Novaland’s interest assistance, she only had to pay a rate of 2-3%.
But now, she has to pay all the interest at the annual rate of 12%, amounting to hundreds of millions of dong per month by herself.
“I can’t arrange the cash flow to pay interest. I’m considering liquidating the contract, paying a fine of billions of dong, or switching to another property with a lower price to reduce the financial burden,” Nguyen said.
Ha, Nguyen and many other homebuyers are on tenterhooks because liquidating their contracts to get money back is not feasible as the property developer has no cash left.
According to Novaland, it had to stop the interest assistance it had applied to most projects because since mid-2022 the global economic situation has fluctuated dramatically, affecting many aspects of the real estate market.
Higher inflation, tightened credit, and rising interest rates have also affected many businesses, and Novaland is no exception, according to the developer.
VnExpress’s records show that most Novaland homebuyers borrowed money from VPBank, TPBank and MBBank.
However, most of the borrowers began working with the banks after Novaland announced the stoppage of its interest assistance.
The manager of a listed bank said the lender would reduce interest rates by 2 percentage points if its borrowers accept Novaland’s plan (homebuyers pay all the interest first, and Novaland will refund them later).
Currently VPBank and TPBank have not released any information about policies regarding support for borrowers who are Novaland customers.
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