That the three real estate-related laws began taking effect on August 1, 2024 is expected to give a much-needed boost to the real estate market. Credit for the real estate sector is projected to recover quickly, but this will also bring risks if not tightly controlled. Increasing real estate credit According to the State Bank of Vietnam (SBV), credit for the real estate sector had exceeded VND3.08 trillion at the end of June 2024, accounting for 21.4% of total outstanding loans in the economy, a 6.8% increase against late 2023. Thus, real estate credit has increased by nearly VND200 trillion versus the end of 2023, VND190 trillion against late January 2024, and VND64 trillion since May 2024, corresponding to a monthly increase of about VND33 trillion. In 2017, real estate credit accounted for only 8% of the total in the banking system, but this figure surged to around 20% in 2018-2019. This drove price increases and exciting real estate business activity during this period, but risks of a real estate “bubble” also started to loom. To ensure stability for the banking system, the SBV issued Circular 22/2019/TT-NHNN on November 15, 2019 to raise the risk coefficient for real estate business […]