return icon Vietnamnet.vn

Real estate firms complain about lack of credit access

While real estate firms complain that they cannot access bank loans, bankers say that they are still providing loans as usual.

Van Xuan Real Estate Group in HCM City expected a VND2 trillion loan after the bank approved a loan. However, in the last minute, lending was canceled. The bank said it could not provide the loan as its credit quota was running out. It saw real estate credit increasing sharply in the first and second quarters, so it had to tighten lending in the third quarter. The failure to borrow capital has upset Van Xuan’s business plans.

The story was related by Nguyen Minh Nhut, deputy CEO of Van Xuan Real Estate Group, at a recent workshop discussing solutions for the real estate market to seek capital. He said that many realtors now feel secure after hearing information about the tightening of lending to the real estate sector.

“Some commercial banks have stopped disbursement for clients who buy real estate products to take shape in the future,” Nhut said. “Leaders of the State Bank of Vietnam (SBV) and some commercial banks affirm that they are still providing loans as usual, but businesses find it ‘unusual’.”

According to Nguyen Van Hau from the HCM City Bar Association, many real estate developers cannot access bank loans even though they have good projects and well-prepared documents.

If real estate developers cannot access loans, project implementation will go slowly and clients buying apartments to take shape in the future will suffer. Because of the lack of capital, the execution of construction projects stops, and steel does not sell well. 

As a result, real estate prices will escalate. Since projects remain uncompleted, liquidity in the real estate market drops and bad debt increases, which affects economic recovery.

Chair of the HCM City Real Estate Association Le Hoang Chau said that realtors need financial and credit solutions. If they cannot access capital sources, they will be “choked to death” because capital plays a very important role in real estate project development.

He said that real estate firms find it very difficult to access bank loans, though the central bank said it doesn’t intend to tighten lending to the real estate sector, but it just controls capital flow to the sector.

Bankers say ‘we are still providing as usual’

While businesses complain that bank loans are inaccessible, bankers affirm that they still keep providing loans.

VietinBank’s deputy CEO Nguyen Dinh Vinh said the real estate loans of the bank have increased by 24 percent compared with the beginning of the year, while real estate loans account for 20 percent of total loans and the bad debt ratio is very small, just 0.3 percent.

Vinh affirmed that the State Bank of Vietnam (SBV) doesn’t have any document that says banks have to tighten lending or restrict credit. VietinBank will still provide loans, prioritizing real estate projects developed by prestigious investors.

Tran Phuong, deputy CEO of the Bank for Investment and Development of Vietnam (BIDV), said the bank’s credit had grown by 6.51 percent as of the end of May 31. Home loans still grew by 3.9 percent, which means that there was no restriction in lending.

According to the Vietnam Banking Association, the housing prices have been pushed up which makes it difficult for banks to appraise loans. It would be safe to lend up to 50% of the value of housing products priced at VND100 million/sq m. But it would be risky to do this if the prices are sky high, at VND300 million/ sq m.

SBV Deputy Governor Dao Minh Tu confirmed that the central bank has not released any document that instructs banks to tighten credit to the real estate sector. The agency only requests banks to control their investments in risky fields, large-scale projects.

SBV still encourages commercial banks to continue providing credit to the projects that can prove their feasibility. It doesn’t make intervention in banks’ operation and it is commercial banks which decide whether to provide loans.

The total outstanding loans to the real estate sector are VND2,288,278 billion and the real estate credit growth rate is 10.19 percent. Up to 94 percent of real estate loans are medium- and long-term loans, according to a report to the National Assembly.Tran Chung

MORE NEWS

Vietnam contributes to International Law Commission

Vietnamese Ambassador Nguyen Hong Thao has pledged to make more contributions to the progress and development of international law, for peace, friendship, cooperation and sustainable development worldwide.

Pencak silat fighter enjoys golden year

Pencak silat fighter Quang Thi Thu Nghia has had amazing year of competition when she has won titles from all competitions that she took part in.

Pop singer to compete at MTV Europe Music Awards

Pop singer Pham Dinh Thai Ngan from HCM City will represent Vietnam at the MTV Europe Music Awards (MTV EMA) 2022.

PM hosts national committee on digital transformation’s third session

Prime Minister Pham Minh Chinh chaired the third meeting of the National Committee on Digital Transformation on August 8 to assess digital transformation pace during the first half of 2022 and devise tasks for the time ahead.

Liem to face off against chess king Carlsen at FTX Crypto Cup

Vietnam’s leading chess player Le Quang Liem has revealed that he will take on Norwegian chess king Magnus Carlsen at the FTX Crypto Cup which is scheduled to take place in Miami, USA, from August 15 to August 21.

Vietnam ranks third overall at ASEAN Para Games 2022

Vietnamese athletes bagged seven more gold medals on August 5, the last competition day of the ASEAN Para Games 2022, retaining their third place in the medal tally.

Corporate bond market struggling with challenges

The size of the corporate bond market is estimated at some VND1,374 trillion, equivalent to 15% of GDP. The Government aims to raise this figure to 20% by 2025.

President requires greater efforts to promote value of Ngoc Linh ginseng

Ngoc Linh ginseng deserves the "National treasure" title, and it is necessary to strongly promote the role of this treasure in improving people's livelihoods, President Nguyen Xuan Phuc said .

EVFTA outpaces CPTPP in preference utilisation rate

The utilisation rate of tax incentives set out in the EU-Vietnam Free Trade Agreement (EVFTA) during Q1 soared by over 32%, representing a four-fold rise compared to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Refusal to issue visas to new VN passport causes problems for travel firms

The rejection of Vietnam’s new passport by some EU member countries is affecting HCM City tourism companies since their customers are unable to travel to those countries.

Vietnam set to scrap COVID quarantine for imported processed seafood

The Ministry of Agriculture and Rural Development has removed COVID-related quarantine requirements for frozen processed seafood products imported for the purpose of reprocessing for export.

HCM City seeks to boost technology transfer from universities

Huynh Kim Tuoc, managing director of Sai Gon Innovation Hub's (SiHub) Start-up Support Centre under the HCM City Department of Science and Technology, affirmed Vietnam holds tremendous potential for technology development

Vigilance urged against COVID-19 amid emergence of new epidemics

Prime Minister Pham Minh Chinh asked ministries, agencies and localities to maintain vigilance against COVID-19 while addressing a meeting in Hanoi on Saturday.

Vietnamese, British agencies coordinate in identifying fire victims

The Consular Department under the Ministry of Foreign Affairs and the Vietnamese Embassy in the UK will continue to coordinate with Vietnamese and British agencies to identify victims in a blaze in Greater Manchester on May 7.

Photo contest highlighting beauty of Vietnamese islands kicks off

Professional and amateur photographers across Vietnam are encouraged to compete in a photo contest highlighting the beauty of Vietnamese Hoang Sa and Truong Sa islands.
back_to_top