With soaring lending interest rates, how are wealthy people thinking about real estate investments?

Amid sharply rising lending interest rates, many people are becoming more cautious about the real estate market. Plans to buy a house, invest in land, or use financial leverage are being considered more carefully. Many middle-class investors are choosing to stay on the sidelines due to concerns about the increasing pressure of interest payments.

However, if you look closely at the market, you’ll find a rather interesting paradox: Even when interest rates rise, there are still experienced investors quietly buying in..

Why do they still dare to invest during a period many consider risky? The answer lies in how they perceive market cycles and how they manage their finances when investing.

Interest rate pressure: Why are many investors hesitant?

To understand market psychology, let’s look at a simple example.

Let’s assume a house costs around VND XNX billion and the buyer takes out a loan. 70% of the value, that is, the loan is VND XNX billion.

• When interest rates are around 10%/yearThe monthly interest is approximately… 58 million VND.
• But what if interest rates rise? 14%/year, monthly interest payments can amount to over 80 million VND.

The difference is greater. 20 million VND per month This puts immense pressure on many families or investors who use financial leverage.

While incomes haven’t increased proportionally, the cost of capital has risen rapidly. This has led many to worry that holding real estate will become a burden.

Therefore, when interest rates rise, the market often adopts a wait-and-see and defensive attitude.

The wealthy view the market in cycles.

However, experienced investors typically don’t view interest rates in terms of short-term periods.

They view the market in that way. financial cycle and economic cycle.

In practice, periods of rising interest rates are typically aimed at:

• controlling inflation
• regulating credit flow
• stabilize the financial system

But these tightening periods often don’t last too longWhen the economy needs a stimulus to grow, monetary policy is usually gradually loosened, and more credit is injected into the market.

When cash flow returns, real estate is often one of the biggest beneficiaries.

Therefore, investors who understand the cycle often Prepare your position early., even when the market isn’t really booming.

Opportunities often arise when the market is tough.

During a booming market, almost everyone wants to participate in investing. Prices rise rapidly, liquidity is high, and optimism is widespread.

Conversely, when interest rates rise and the market is sluggish, many people begin to hesitate. But it is precisely during this period that Investment opportunities sometimes become more apparent..

Some factors that are easily noticeable during a challenging market period include:

• The seller is willing to negotiate a better price.
• The developer offers various financial support policies.
• Payment schedules have become more flexible.

For long-term investors, this is a time when the market is less competitive and choosing the right assets can be easier.

The difference lies in how cash flow is managed.

One of the reasons why people with financial resources can still invest during periods of high interest rates is They are not entirely dependent on financial leverage..

Instead of borrowing the maximum amount, they usually:

• maintain a safe loan-to-value ratio.
• have a reserve fund
• Calculate the long-term interest-bearing capacity.

As a result, even if interest rates rise in the short term, they can still hold onto their assets without feeling pressured to sell.

Ability traversing the market cycle This is a major advantage for long-term investors.

Choosing the right project and developer has become more important.

In a volatile market environment, the key factor is… the developer’s reputation and the project’s quality It became particularly important.

Projects developed by large companies typically include:

• clear legal
• Construction progress is on schedule.
• complete ecosystem of amenities
• Bank linkages to provide financial support.

In addition, many current projects also offer programs such as:

• interest rate support during the initial period
• Extend payment schedule
• principal grace period

These policies help buyers reduce financial pressure when interest rates are high.Perspectives from experienced investors

In practice, the investment decisions of experienced investors are often based on market analysis and long-term financial strategies, rather than being driven by short-term fluctuations.

These investors tend to pay more attention to:

• location and development potential of the area
• planning and infrastructure
• the developer’s reputation
• the potential for an asset to increase in value over several years

Therefore, even with high interest rates, the demand for quality real estate products always remains.

Market perspective from Saigon Luxury

In the luxury real estate segment, Saigon Luxury It is a specialized unit with a client base primarily consisting of Businesspeople, investors with strong financial resources, and those with many years of experience in the market..

Thanks to working directly with this client group, the Saigon Luxury team has been able to observe quite clearly how experienced investors approach the market in each cycle.

According to market observations, the majority of high-end customers are not overly influenced by short-term interest rate fluctuations. Instead, they focus more on long-term factors such as:

• the true value of the asset
• potential for regional infrastructure development
• quality and legal aspects of the project
• potential for increased value in the coming years

This is also why, even during periods of market volatility, the luxury real estate segment has consistently maintained a stable volume of transactions.

With experience operating in this segment, Saigon Luxury regularly accompanies clients in market analysis, project selection, and the development of investment strategies tailored to each stage of the real estate cycle..

What should investors do during a period of high interest rates?

A period of high interest rates isn’t necessarily a bad time to invest, but it’s also not the time to make hasty decisions.

Here are some important principles that investors can consider:

First, carefully assess your financial capabilities.

Ensure that cash flow is secure enough to withstand interest rate fluctuations over a period of time.

Secondly, prioritize assets with real value.

Areas with developed infrastructure, clear planning, and long-term growth potential tend to retain their value better.

Third, take advantage of financial support policies.

Many current projects offer interest rate support and flexible payment schedules, helping to reduce financial pressure in the initial stages.

Conclusion

Rising lending interest rates will certainly put pressure on the real estate market in the short term. However, for experienced investors, this is not only a challenging period but also a time to look for good opportunities.

The important thing is not whether the market is hot or cold, but rather… How each person perceives the cycle, manages cash flow, and chooses suitable assets..

In real estate investment, sometimes… Success doesn’t come from buying the most, but from buying at the right time and with the right strategy..