Real estate credit control: Strict but not extreme.

With real estate credit ballooning to nearly four times the size of public investment, the question arises: What can be done to control this flow of money?

The shadow of 4.1 trillion VND and questions about capital efficiency.

According to data from the State Bank of Vietnam, by the end of August 2025, the total outstanding real estate credit had reached 4.1 trillion VND, of which loans serving real estate business activities alone accounted for nearly 1.823 trillion VND. This scale is equivalent to almost four times the public investment capital in 2025, but this sector only directly contributes about 3.5% to GDP.

Data from the Ministry of Construction shows that urban development and housing projects continue to lead in terms of credit allocation, with 614,737 billion VND. This is followed by industrial parks and export processing zones with 114,274 billion VND. Capital is also allocated to sectors such as office rentals (61,946 billion VND); tourism and resorts (62,487 billion VND); restaurants and hotels (64,560 billion VND); and loans for land use rights (190,113 billion VND).

According to analysts, this credit allocation picture shows a strong expansion of loan capital into sectors sensitive to economic cycles. More importantly, these figures reveal that capital is being strongly drawn to high-yield areas where the spillover effects on the economy are limited.

By the end of August 2025, the total outstanding real estate credit had reached 4.1 trillion VND. Photo: Duy Minh.

In fact, according to the Q3 2025 financial reports of listed banks, real estate loans increased in most banks. Among commercial banks, Techcombank led the system with VND 237,838 billion, accounting for 32.81% of total outstanding loans; VPBank ranked second with VND 205,955 billion;SHB ranked third with VND 184,044 billion, but had the second highest proportion in the system, over 30% of total outstanding loans. These figures reflect the strong flow of capital into real estate, a phenomenon that is not new but is reaching a scale requiring close monitoring.

Meanwhile, medium and small-sized banks remain on the defensive. MBBank, HDBank, TPBank, MSB, and LPBank all maintain single-digit proportions of real estate loans, demonstrating caution in the face of market fluctuations. However, even in this group, the growth in outstanding loans continues, proving that the attractiveness of the real estate market has not diminished.

Experts warn that credit flowing into real estate currently accounts for nearly a quarter of the economy's total capital, while its job creation potential, added value, and spillover effects are significantly lower compared to manufacturing, trade, and service sectors. This misdirected flow of money could unbalance the economy and increase systemic risk if the market reverses.

The fine line between recovery and a bubble.

According to Dr. Pham Thi Hoang Anh, Deputy Director of the Banking Academy, collateral in the credit system mainly comes from the real estate market. If the market falls into a recession, the banking system will face immense pressure from bad debts. This shows that real estate credit risk lies not only in the scale of outstanding loans, but also in the quality and authenticity of the collateral.

The current real estate market is in a state of "buy high, sell high". Photo: Quoc Anh.

Sharing a cautious perspective, economist Dr. Dinh The Hien believes that the current market is in a "buy high, sell high" state, an early warning sign of a price bubble. He explains that when buying and selling activities are based solely on short-term speculation, not linked to real cash flow or exploitation value, real estate values ​​are pushed up too high, while liquidity becomes increasingly poor.

"The 'buy high, sell high' mentality may benefit a group of investors in the short term, but it creates a rapid, volatile cycle that can easily lead to collapse," Mr. Hien warned.

Notably, while credit to the real estate sector has increased sharply, it hasn't created a "wave." Credit growth in the first nine months of the year reached approximately 13%, while capital inflow into real estate was nearly 20% higher, yet liquidity remains sluggish. "Money has been injected, but it hasn't sanitized the market," Mr. Hien commented. This indicates that the capital flow is no longer creating a positive ripple effect, but is instead putting double pressure on both banks and the market.

According to safety principles, banks should only lend a maximum of 70% of the property value, with buyers or investors contributing the remaining 30%. However, in reality, banks have been lending even the deposit amount, meaning credit has become deeply involved in speculative cycles. When prices rise too quickly, short-term investors face difficulties, credit accumulates, and bad debts increase... this is a scenario many experts have witnessed in previous cycles.

However, it cannot be denied that credit remains the "lifeline" for the recovery of the real estate market, especially as many projects previously stalled due to legal issues are now being resolved. The increase in credit partly reflects expectations of recovery, but it needs to be guided selectively, avoiding flow into speculative areas.

Therefore, controlling real estate credit does not mean extreme tightening, but rather adjusting the pace, aiming for a balance between recovery and system safety. A clear distinction needs to be made between capital for genuine housing needs, capital for housing construction, industrial parks, tourism, and capital for speculative activities.

In fact, if real estate credit continues to balloon without creating real value, a bubble could return, and the price to pay would not only be bad debt or declining growth, but also the instability of the entire financial system.

According to Dr. Le Xuan Nghia, a member of the Prime Minister's Policy Advisory Council, outstanding loans currently stand at approximately 4 trillion VND, accounting for about 24% of the total outstanding loans in the entire system. This is not considered high compared to many developed countries, which often reach 40%. The fundamental solution is to rationally redirect credit flows towards social housing and affordable housing segments, instead of concentrating them on speculation or high-end projects.

Source: https://congthuong.vn/kiem-soat-tin-dung-bat-dong-san-chat-che-nhung-khong-cuc-doan-429697.html