A shortage of affordable housing products, a high number of outstanding loans, and many bankrupt real estate firms are some of the problems mentioned at the recent national conference on the Vietnamese real estate market.

The Vietnamese government and banks have developed a strategy to improve the credit status of Vietnamese real estate businesses by offering a $5 billion loan package.

Offering more credit to the real estate sector has been likened to pumping a well-inflated balloon.

With the Government’s drastic measures to address problems related to legal bottlenecks, lack of capital access, and challenges in corporate bonds, the real estate market is expected to recover from the third quarter, experts have said.

As more than $52 billion is due to banks and bondholders from real estate corporations, not to mention the requirement for additional loans, experts say a purge in the real estate market is unavoidable.

With an average monthly income of VND7.5 million, Vietnamese need to save money for 50 years to be able to buy an apartment with two bedrooms.

The credit growth rate of the banking system in the last 10 years has slowed down compared with the previous decade, hovering around 14 percent per annum in 2012-2021 instead of 30 percent in 2001-2010.

While rents for affordable apartments remain steady in HCM City, they have fallen sharply and continue to do so in the case of high-end apartments.

The information about the big preferential credit package specifically reserved for the real estate sector was good news at a conference on the real estate market development presided over by the Prime Minister on February 17.

Economists believe the most important action that needs to be done to protect the bond market is retaining investors’ confidence. Two special solutions have been proposed.

While many experts have called for action to rescue the real estate market, others believe that it is necessary to be cautious when pumping more money into the market.

Real estate accounted for 21.6 percent of total outstanding loans to the economy (VND2.58 quadrillion).

Of 10 listed commercial banks with the largest charter capital, VIBBank has the lowest amount of real estate loans, while Techcombank is the biggest lender.

The industrial real estate sector has good prospects in 2023 due to short supply, a shift in the supply chain to Vietnam and its favourable investment policies, experts said.

Struggling with difficult access to bank loans, the real estate sector has got good news that two major credit packages totaling VND230 trillion would be launched after Prime Minister Pham Minh Chinh met with real estate businesses on Friday.

Prime Minister Pham Minh Chinh on February 17 urged stakeholders in the real estate market, including the State, businesses, buyers and people, to join efforts for the safe, heathy and sustainable development of the market.

The HCM City Real Estate Association has proposed removing controversial regulations on apartment ownership termination in the draft revised laws relating to the real estate market.

While the real estate market is gloomy and realtors need capital, some enterprises are developing projects with investment capital of trillions of VND.

Real estate prices have been staying high, though they have slightly fallen at times at some projects, according to the Ministry of Construction (MOC).

The ongoing credit crunch and the Government’s restrictions on corporate bond sales have put an additional strain on the debt-ridden real estate sector.