Where does real estate credit flow to?

Real estate credit in Ho Chi Minh City as of the end of April reached more than 1,116 trillion VND, an increase of 2.85% compared to the end of 2024. The paradox is that while credit is increasing sharply, there are not many new projects, transactions in the market are not high, so where does the money go?

New projects still trickle in

Specifically, the State Bank of Vietnam (SBV) Branch in Region 2 said that by the end of April, the total outstanding real estate credit in Ho Chi Minh City reached VND 1,116 trillion, up 0.34% compared to the previous month and up 2.85% compared to the end of 2024. The scale of real estate credit continued to be maintained and accounted for about 28% of the total outstanding credit in the area. In particular, real estate credit for the self-use group (loans to buy houses, transfer land use rights to build houses; loans to repair houses...) still accounted for a high proportion of the total outstanding real estate credit, accounting for 65% and reaching VND 727,000 billion, up 0.05% compared to the previous month and up 0.65% compared to the end of 2024.

Despite credit growth, cash flow out of the market is very little.

PHOTO: DINH SON

While the figures are quite good, in reality both transactions and new projects are "low". Therefore, many people ask, where did the real estate credit of over a million billion dong go?

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, said that although the real estate credit growth figures were very large, he did not know who benefited from this growth. Because when businesses were still struggling to process legal documents and could not access capital, not many people borrowed to buy real estate. Specifically, in the first 4 months of the year, Ho Chi Minh City had only 3 projects eligible to mobilize capital, with a total of 3,286 apartments, all of which were luxury apartments. In the first 4 months of the year, no project was transferred because according to the law, a project must complete its financial obligations before it can be sold to another partner.

"Compared to 2017, the year the market exploded, the current supply is only 10%. In reality, there is still a lack of supply, especially affordable housing, especially social housing, and real estate prices are still increasing steadily. The total number of apartments put on the market since the beginning of the year is very small, transactions are not many, but the credit growth as reported by the State Bank is very strange. Not only Ho Chi Minh City increased but also nationwide, I also do not understand", Mr. Le Hoang Chau shared and added that currently, businesses are still having difficulties with cash flow and capital, especially in the context that businesses are struggling to deal with the maturity of corporate bonds around August - December 2025. This makes them continue to struggle, having to negotiate with customers to extend debt repayment.

Dr. Dinh The Hien, Director of the Institute of Informatics and Applied Economics , also affirmed that in reality, enterprises still lack capital, have difficulty accessing capital, and the amount of money pumped into the market is not much. Therefore, if real estate credit increases, it is possible that organizations and individuals will borrow to pay off old debts, borrow to roll over debts. Interest rates combined with the increase in the cost price of inventories will cause credit balances to increase accordingly.

"Through a survey of about 100 listed companies on the stock exchange, I found that credit growth in the real estate and construction sectors has been continuously decreasing. Because cash flow in real estate comes from two main sources: business cash flow and financial cash flow. However, both of these sources are facing difficulties, so real estate companies are still facing many difficulties this year," Dr. Dinh The Hien analyzed.

Transactions among people flourish, secondary market is bustling

Overall, Dr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, commented: Since the Lunar New Year, the southern market has shown signs of growth and is operating better than in 2024. Although there are not many new projects, transactions among people are also better. According to statistics, the rapid increase in the number of real estate transactions has helped revenue from land in Ho Chi Minh City reach a high level, reaching VND 2,200 billion in the first quarter of 2025, an increase of more than VND 540 billion over the same period. In addition, revenue from real estate business services also reached VND 25,547 billion in March, an increase of 9% over the previous month. Accumulated in the first 3 months of the year, revenue from this industry reached VND 72,321 billion, an increase of 16%. This is a positive increase, clearly demonstrated by the level of interest of investors and shows the recovery of the real estate market.

Therefore, according to Dr. Nguyen Van Dinh, although the volume of primary market transactions is low due to limited supply, transactions in the secondary market and real estate transactions among the people are taking place very actively. This may be the reason for strong credit growth. Not only that, although projects in Ho Chi Minh City in recent months have been few, in surrounding areas such as Long An, Dong Nai, Ba Ria-Vung Tau, Binh Duong, the number of completed and opened projects is very high. Meanwhile, enterprises "located" in Ho Chi Minh City may have borrowed in the city to bring money to invest in the provinces. In addition, the sharp increase in real estate prices in recent times has also caused the value of loans to increase. "But one thing is easy to see, in the current market, real demand is low but investment, speculation and hoarding are high, so credit capital is flowing into these groups more than flowing into projects," Dr. Dinh analyzed.

Sharing the same view, economist Huynh Phuoc Nghia also said that credit growth is mostly in loans for home purchase, repair, and construction among people; while new projects "lose" because the supply has been very low since the beginning of the year. This is also consistent with the report from the State Bank of Vietnam when it said that loans for home purchase, transfer of land use rights for home construction, loans for home repair, etc. still account for a high proportion of total outstanding real estate credit. In addition, credit growth in recent times is related to restructuring and mortgage because the cash flow to the market is very low. It is possible that projects in Ho Chi Minh City are difficult to borrow due to legal deadlock, but businesses can use projects in the provinces and other products to guarantee loans in Ho Chi Minh City.

Supply and prices both increase

The Ministry of Construction 's report on the real estate market in the first quarter of 2025 shows that the volume of real estate transactions in the three types of apartments, individual houses and land plots tends to increase compared to the fourth quarter of 2024. Of which, the apartment and individual house segment had 33,585 successful transactions, equal to 132% compared to the fourth quarter of 2024. The land plot segment had 101,049 successful transactions, equal to 116.4% compared to the fourth quarter of 2024. Meanwhile, in the whole quarter, there were 14 projects, with a scale of about 3,813 completed apartments, equal to 140% compared to the same period in 2024. There were 26 newly licensed projects with a scale of about 15,780 apartments, equal to 144% of the fourth quarter of 2024 and equal to 136% compared to the same period in 2024. There are 994 projects under construction nationwide with a scale of about 399,873 apartments. Meanwhile, there are 59 projects eligible to sell future housing, with a scale of about 19,760 apartments, equal to 96.7% compared to the fourth quarter of 2024 and equal to 155.2% compared to the same period in 2024.

Source: https://thanhnien.vn/tin-dung-bat-dong-san-chay-vao-dau-185250522212250198.htm