Tight control over real estate credit to mitigate risks
The State Bank of Vietnam (SBV)’s decision to tighten control over real estate credit has helped to restrict speculation while making the market transparent and preventing a real state bubble, economic experts have said.
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| The State Bank of Viet Nam (SBV)’s decision to tighten control over real estate credit has helped to restrict speculation. (Photo: VNA) |
Deputy Governor Dao Minh Tu underlined that the move only aims to restrict segments with high risk of speculation in major projects, instead of impeding investment flow in real estate.
Economic expert Nguyen Tri Hieu said control over real estate credit is necessary to purify the market and reduce risks for the economy, especially amid the boisterous development of the sector in the recent past.
According to expert Can Van Luc, data from the SBV showed loans for home purchases and repairs rose by about 15-16 percent, while loans for real estate trading were up 7-8 percent.
Real estate credit growth is forecast to rise 9-10 percent this year, Luc added.
In its latest strategy for the banking industry, the SBV said credit must be channelled into production and business industries to have a positive impact on socio-economic development. It also urged banks to refrain from providing credit to businesses operating in risky areas, such as real estate, securities, corporate bonds, or build-operate-transfer (BOT) and build-transfer (BT) transport projects.
Some banks have temporarily halted loans to the real estate sector in the short term in the wake of the SBV's policy on controlling credit growth in risky areas.
Sacombank has recently required all its branches and transaction offices to focus loans on a number of production and priority industries, such as agriculture, rural development, exports, supporting production, small- and medium-sized enterprises, high-tech applications, trade, service and logistics.
Sacombank has also directed its branches and offices not to fund the real estate sector until the end of June, except for the bank’s staff and relatives to buy, build or repair houses for living purposes.
Techcombank has recently also notified its business units about controlling the disbursement limit for loans to buy real estate. The bank said it would suspend the provision of real estate loans from March 25, and would consider the disbursement in the second quarter.
(Source: VNA)
