Legal problems and capital shortage were the major reasons behind the real estate market’s stagnancy over the last year. The government has convened many meetings and made numerous instructions to help recover the market.

The Prime Minister recently sent Telegram No 993, instructing every related ministry and branch to take measures to ensure safe and sustainable development of the real estate market.

The Prime Minister has requested Governor of the State Bank of Vietnam (SBV) to instruct commercial banks to promote lending to the real estate sector and apply solutions to cut operation costs, which would pave the way for interest rate cuts.

The Prime Minister has also requested to remove inappropriate administrative procedures, so that real estate projects and home buyers can access credit more easily. Commercial banks have been requested to create a special credit policy reserved for feasible, quickly implemented real estate projects. 

The Prime Minister’s requests pleased realtors, while analysts commented that both buyers and realtors will be able to access bank loans more easily and enjoy better interest rates.

Dat Xanh Mien Bac’s CEO Vu Cuong Quyet said this is a government’s great effort to open up capital sources and support the real estate market amid capital shortage. Quyet said the real estate market will see improvement in liquidity by the end of the year.

“Home buyers now can borrow money from banks, but have to satisfy many requirements, while the interest rates are still high at 9-10 percent. Meanwhile, enterprises have to pay 11-13 percent per annum,” Quyet said.

He said that realtors dare not borrow much capital at this moment because of tight requirements and high interest rates. They only borrow enough capital to maintain their operations, rather than expand.

Also according to Quyet, though the Prime Minister has instructed to support real estate firms, effectiveness will still depend on commercial banks.

“We hope that the Prime Minister’s directions will urge banks to speed up lending. To develop the real estate market, banks should not be too cautious when providing loans. The lending interest rates should be around 8-8.5 percent per annum,” he said.

According to Nguyen Anh Que, president of G6, banks cut the interest rate from 15 percent in late 2022 to 11-11.5 percent in the fourth quarter 2023. However, realtors want a further interest rate cut, saying that a interest rate of 10.5 percent will be reasonable.

Hong Khanh