HCMC – In rapid response to directives from the Prime Minister, the State Bank of Vietnam (SBV) has revised Circular 06/2023, which is foreseen to affect the real estate sector’s access to capital.
On August 23, 2023, the SBV issued Circular 10/2023, which suspends the enforcement of Clauses 8, 9, and 10 of Article 8 within Circular 39/2016, a regulation governing lending activities by banks. Circular 39/2016 was initially composed of six clauses but was later expanded to 10 due to the addition of provisions from Circular 06/2023.
Circular 06/2023, scheduled to take effect in early September, incorporates certain provisions from Circular 39/2016. These new regulations restrict banks from providing loans for activities such as equity transfers, capital repayment, and capital contributions towards investment projects that are not yet qualified for business operations.
This adjustment has raised concerns within the real estate industry. Experts have highlighted two primary issues: an increase in the number of cases where lending is prohibited and a lack of clarity regarding borrowing conditions.
Real estate enterprises are worried that these provisions might hinder access to capital, potentially impacting housing supply and individual property purchases.
The HCMC Real Estate Association (HoREA) emphasized that Circular 06/2023 would heighten credit access “barriers” compared to previous regulations. This is due to the expansion of cases in which banks are prohibited from lending, which has grown from 6 to 10 cases.
These constraints could impede credit access for various stakeholders, including real estate firms, prospective homebuyers, and investors, according to HoREA.
While the State Bank of Vietnam stated its intention to establish minimum lending conditions in alignment with the Law on Credit Institutions, HoREA argued that the revised circular adds further obstacles, making credit access more challenging than before.
