HCMC – The State Bank of Vietnam (SBV) has no regulations that prohibit banks from making real estate loans, said SBV Governor Nguyen Thi Hong.
She was responding to Do Huy Khanh, a National Assembly deputy from Dong Nai Province, who inquired about real estate lending at a Q&A session during the ongoing NA session today, November 11, reported the Vietnam News Agency.
Khanh pointed out that Vietnam’s real estate debt is only 20% compared to China’s, which once exceeded 30%.
Governor Hong explained that banks have the autonomy to decide which sectors to lend to and at what ratios, based on their available capital. She said that banks must carefully consider medium and long-term real estate loans. Some real estate businesses have the capacity to repay, but banks may be limited by their short-term capital, particularly for large-scale, long-term projects.
“With 80% of deposits in Vietnam being short-term, continued lending in the real estate market must prioritize safety,” she said. “This ensures that banks can meet withdrawal demands. The key is to maintain the safety of banks and the overall system. The SBV does not ban real estate lending.”
NA deputy Huynh Thi Phuc from Ba Ria-Vung Tau Province raised concerns about potential risks and bubbles in the real estate and financial markets, given the Government’s policies to stimulate demand.
Governor Hong responded that the Government has prioritized economic growth since the second half of 2023, implementing a reasonably expansive fiscal policy with strategic focus and a proactive, flexible monetary policy.
“Due to the short-term nature of this policy, the SBV must proactively monitor and assess the macroeconomic situation, taking measured actions and remaining vigilant about inflation,” Hong noted.
She outlined the SBV’s two primary functions: managing monetary policy to control inflation, stabilize the macroeconomy, and the monetary and foreign exchange markets; and overseeing monetary and banking activities.
She emphasized the importance of the banking system’s safety, as any potential risks could have significant consequences for the economy. In recent years, the SBV has used credit growth quotas to manage credit levels.
The projected credit growth for 2024 is around 15%, with a target of 15% for 2025. An SBV report showed that by the end of September 2024, real estate credit had increased 9.15% versus the end of 2023, surpassing the overall system credit growth rate of 9%.
Consumer real estate credit, including loans for house purchases and repairs, only edged up by 4.62%. The proportion of consumer credit within total real estate credit decreased from 65% to 60%, while credit for real estate businesses increased from 35% to 40%.
