According to the State Bank of Vietnam, outstanding real estate loans of commercial banks now account for only 9% of total outstanding loans of the whole banking system. The Bank for Investment and Development of Vietnam (BIDV) has outstanding real estate loans of 5.87% of its total outstanding loans, while Sacombank 3%.
However, some banks have announced they have resumed real estate credit as capital has become more profuse. VP Bank, for example, has announced VND2tril capital has been set aside for funding real estate projects, while Military Bank said that the bank’s management board has approved a plan to provide real estate credit at up to 10% of its total credit limit. Prior to that, Sacombank and some other banks launched products on funding house purchase plans with payment by installments.
The resumption of real estate credit was previously expected to be good news for people and real estate developers. However, contrary to all predictions, neither of them seems to care.
Nguyen Van Duc, Deputy of Dat Lanh Real Estate Company, said that enterprises prefer seeking capital from other sources, because bank loans are offered at overly high interest rates. If they cannot arrange capital, Duc said, they will leave their projects pending.
Marc Townsend, Managing Director of CBRE Vietnam, a real estate service provider, said most projects last four years or so. Therefore, this causes heavy losses to real estate developers, who cannot afford overly high interest rates.
A representative of Saigon Real Estate Company said that even production companies dare not borrow short-term money for working capital, while real estate firms need longer-term loans.
Nguyen Dang Son, Deputy Head of the Urban Study and Infrastructure Development Institute, said it is now the right time for those who have real demand for accommodations to purchase houses. However, if they have to borrow money at overly high interest rates and pay in installments over several years, the interest will be as much as the values of the houses.
Dinh The Hien, a real estate expert, said that it is necessary to reconsider the interest rate policy in order to make bank loans accessible to people, thus helping warm up the real estate market.
(Source: NLD)
Comments