HCMC – Vietnam’s central bank governor has said real estate loans are being restricted to protect commercial banks and control inflation.
Speaking at a Q&A session of the National Assembly today, November 3, Nguyen Thi Hong, governor of the State Bank of Vietnam (SBV), said that at a time when inflation control and bank safety are put first, it would be unwise to increase lending to real estate businesses.
Credit loosening for the real estate sector would undermine the SBV’s monetary policy goals, so prudence would be required for real estate lending, she said.
Bank credit is just one of the funding sources for the property market, she noted, adding property businesses could raise capital from other sources such as direct investment, the stock market, corporate bond sales, equity and the public.
The central bank’s monetary policy is to ensure macroeconomic stability and capital safety for commercial banks, she said. Meanwhile, it is potentially risky to lend to real estate businesses because real estate loans are huge and come with a long term.
However, Minister of Construction Nguyen Thanh Nghi said at the Q&A session that laws and regulations should be revised to make it easier for sound property firms, especially those having good projects, to borrow.
The property market is still heavily reliant on bank loans and corporate bonds, he said, but cash flow into real estate projects has not been properly controlled due to legal loopholes.