Real estate loans account for 21.46% of total loans.

On the morning of November 13th, the State Bank of Vietnam and the Ministry of Construction held a conference to implement Prime Minister's Directive No. 993/CĐ-TTg dated October 24, 2023.

According to the State Bank of Vietnam (SBV), outstanding credit to the real estate sector as of September 30 reached VND 2.74 trillion, an increase of 6.04% compared to December 31, 2022, accounting for 21.46% of the total outstanding credit to the economy .

Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors, stated that the State Bank of Vietnam (SBV) closely monitors developments in the real estate and credit markets to implement solutions that both ensure the safety of the banking system and contribute to promoting economic growth and ensuring the healthy and sustainable development of the real estate market.

In document 2931/NHNN-TD dated April 24, the State Bank of Vietnam directed credit institutions to facilitate access to credit for real estate project investors and homebuyers when they fully meet the credit granting conditions as prescribed. Credit capital should be focused on real estate projects that meet legal requirements, have the potential to sell their products, can repay loans fully and on time, and meet the real needs of the people, especially social housing projects, worker housing, housing suitable for people's incomes, and types of real estate serving production, business, and social welfare purposes with high efficiency and the ability to repay loans.

Consider extending credit to developers, construction contractors, homebuyers, and suppliers of construction materials to increase capital turnover and liquidity in the real estate market. Proactively and strictly control cash flow, the purpose of loan utilization, and ensure full and timely debt collection. Promote lending to homebuyers and debt collection from sellers within the same project.

In addition, the State Bank of Vietnam has directed and guided the implementation of credit programs worth VND 120,000 billion for investors and buyers of social housing, worker housing, and apartment renovation and reconstruction projects, with interest rates 1.5% to 2% lower than the average lending rates of the four state-owned commercial banks.

Governor of the State Bank of Vietnam, Nguyen Thi Hong, delivered a speech at the conference.

Many opinions at the conference suggested that comprehensive solutions, coordinated among various ministries, sectors, and localities, are needed to continue addressing and resolving legal procedural obstacles in the real estate sector; developing the medium- and long-term capital market; and continuing to implement the tasks assigned by the Prime Minister in documents such as Resolution 33/NQ-CP and Official Dispatch No. 993/CĐ-TTg.

Regarding the banking sector, the State Bank of Vietnam (SBV) stated that it is urgently reviewing and evaluating the implementation of Circular 03 and Circular 06 in order to promptly issue amendments and supplements that are consistent with market realities, increase access to credit for the economy, and ensure the safety of the system in accordance with the Prime Minister's directives.

Continue directing credit institutions to implement solutions to improve access to capital for businesses and individuals; continue implementing the policy of restructuring loan repayment terms and maintaining loan classifications to support customers facing difficulties according to Circular 02/2023/TT-NHNN.

Closely monitor the implementation of the 120,000 billion VND program to coordinate with the Ministry of Construction in reviewing and proposing solutions to accelerate the program's implementation, contributing to promoting investment, construction, and purchase of social housing by the people.

Continue to coordinate with ministries and agencies to finalize legal regulations to support the sustainable development of the real estate market while controlling risks and ensuring the safety of credit institutions' operations.

Regarding social housing loans under Decree 100/2015/ND-CP currently being implemented at the Vietnam Bank for Social Policies, the total maximum loan capital according to Resolution 43 and Resolution 11 is 15,000 billion VND.

As of September 30th, the Vietnam Bank for Social Policies (NHCSXH) had only disbursed 55% of its planned funds due to limited supply of social housing in localities, many eligible individuals lacking the necessary conditions for social policy loans, and developers failing to release collateral when selling homes to buyers, thus preventing the registration of secured transactions…

Therefore, on November 2nd, the Government issued Resolution No. 181/NQ-CP adjusting the unspent capital plan of four preferential loan programs, including this program, to supplement loans for job creation.

For the 120 trillion VND program, the biggest difficulty is the limited supply; to date, only 23 provincial and city People's Committees have announced the list of projects eligible to participate in the program.

According to reports from the State Bank of Vietnam's provincial and city branches, a review of the projects in the list revealed that out of the 54 projects announced: 5 projects have been approved for credit; 30 projects (55.5%) have no need for loans; 11 projects (20.4%) do not meet the loan eligibility requirements, including 6 projects facing legal obstacles; and 8 projects (15%) are currently being appraised by commercial banks. Therefore, the implementation of the Program has not progressed as planned.

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