HCMC – The Prime Minister has issued a directive urging banks to push lending to the real estate sector.
This move comes as numerous real estate businesses have reported difficulties in gaining access to bank loans.
The Government Office has recently released a statement summarizing Prime Minister Pham Minh Chinh’s conclusions at a conference evaluating the implementation of Resolution 33/NQ-CP issued on March 11, 2023 to roll out a number of measures for propping up the development of the real estate market in a safe and sustainable manner.
Key points from the Prime Minister’s directive include the role of the State Bank of Vietnam (SBV) in reviewing and promoting lending to real estate enterprises. The directive further emphasizes the need for banks to provide effective solutions that make it easier for businesses, real estate projects, and homebuyers to access credit.
The SBV, in collaboration with the Ministry of Construction and local authorities, has been tasked with boost the disbursement of a credit package totaling VND120 trillion. This package was introduced in April of this year following the Government’s Resolution 33, aimed at encouraging investors to develop social housing projects and supporting workers in purchasing a home.
The Prime Minister’s directive also urges banks to lower interest rates, simplify administrative procedures for borrowing, and incentivize housing supply and demand through promotions.
However, access to capital remains a challenge for many real estate businesses as their concerns shift from high interest rates to difficulties in obtaining loans.
The HCMC Real Estate Association has proposed that the SBV amend Circular 06/2023, citing concerns over potential credit constraints for real estate businesses.
Statistics from the SBV showed an overall credit growth rate of 4.03% by June 27 compared to December 2022 and 9.08% versus the same period last year. Credit flow into the real estate sector grew 14% in the first five months of the year, reflecting potential early signs of market recovery.
On the other hand, consumer credit for real estate observed a decline of 1.32%, in contrast to a 15% increase during the same period last year, showing hesitation among homebuyers.
Data from the Ministry of Construction indicated a continued decline in housing development projects, muted transactions, and ongoing increases in property prices during the second quarter of the year.
Between April and June, Vietnam saw the completion of seven commercial housing development projects, resulting in a total of 2,424 projects.
During this quarter, the number of newly established real estate firms slumped by over 61% compared to the year-ago period. Meanwhile, the number of realty firms exiting the market surged by over 30%.
