An apartment complex on the side of Hanoi Highway in HCM City. (Photo: VNA) Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong saidthe sector remained a key economic driver as it's closely tied to many otherindustries, making it one of the top priorities for Vietnam'spolicymakers.
Ha Thu Giang, head of the credit department at the SBV, said bySeptember 30 the total amount of credit outstanding in the sector had reached 2.74quadrillion VND, an increase of 6.04% since the end of 2022 and accounting for21.46% of the entire economy's credit outstanding.
Giang said during the first nine months of 2023, the sector'scredit had shown a higher growth rate compared to the same period last year,reaching 21.86%. This had been the result of a coordinated effort by variousgovernmental agencies and local authorities to identify and resolve thesector's obstacles and challenges.
For example, she said a lending programme to support housing underGovernmental Resolution 02 had disbursed nearly 30,000 trillion VND to morethan 53,000 households and individuals.
In addition, the Social Policy Bank of Vietnam (VBSP) hadintroduced 5 different loan programmes related to the property market at atotal amount of over 27 trillion VND to nearly a quarter of a millioncustomers.
Meanwhile, BIDV and Agribank, among some of the largest commercialbanks in Vietnam, had signed various credit agreements to finance three projectswith a disbursement of 105 billion VND to eligible projects in 22 localauthorities nationwide.
Difficulties and challenges for the sector, however, would remainfor the foreseeable future, said the governor.
Economists and industry insiders have long voiced their concernsover a number of issues faced by the sector including lengthy legal proceduresrelated to land clearance and acquisition, supply and demand mismatch,weakening purchasing power and limited finance and management capacity on thepart of property businesses.
In particular, economists said there had been an oversupply ofhigh-end apartments and villas, contributing to high property prices that hadbeen largely out of reach for middle-income buyers.
To make matters worse, developers often overly relied on loans,bonds and deposits from future home buyers, sending prices even higher.
The sector had also been struggling with bad debt in recent yearswith a ratio of 2.89% by the end of September, a sharp increase from the samefigure recorded at the end of 2022 at 1.72%. There had been a significantdownward trend among bank customers applying for home-buying loans compared tothe last few years.
Speaking at the conference, industry insiders called for largercredit room for the sector, lower interest rates and easier access tocapital.
Nguyen Van Cuong, Vice Chairman of Hung Thinh Group, said evenafter his group managed to reach an agreement with LPBank for a credit limit of5 trillion VND, the bank soon exhausted its lending room after disbursing justover 2 trillion VND.
He called for easier lending conditions and extended credit by thebanks to prolonged projects in order to give businesses more breathing room inthese difficult times.
Le Hoang Chau, Chairman of the HCM City Real Estate Association(HoREA), urged the SBV to allow for slightly loosened loan conditions fordevelopers, investors and homebuyers.
According to the association, the current conditions set out underArticle 7 of Circular 39/2016/TT-NHNN (SBV) have remained unchanged since 2016and, given the current conditions of the property market today should bereviewed and potentially adjusted to grant easier access to credit./.
VNA
