The property sector did not have difficulty accessing bank credit last year, and in fact 21.2% of all loans went to it, a central bank executive said Wednesday.
Banks did lend to developers with feasible projects, and only some high-risk segments that could have caused a bubble because of speculation was affected by the credit tightening, Dao Minh Tu, deputy governor of the State Bank of Vietnam, said at a meeting with property industry executives.
According to data from the central bank, loans outstanding given to the real estate sector as of the end of last year was VND2,580 trillion (US$109.3 billion), 24% up from a year earlier.
The 21.2% rate was the highest in the last five years. Of the amount, 69% was for buying homes and the rest went to developers.
The first half of the year saw the highest growth rate in a decade as many banks used up the full-year credit quota. After they failed to get the cap increased, businesses and home buyers found it almost impossible to borrow in the second half.
The head of a commercial bank said with the corporate bond market frozen, developers rushed to lenders, who could not meet their huge demand.
According to banks, the Ministry of Construction and the HCMC Real Estate Association, 70% of difficulties faced by the property industry are due to legal issues, Tu said.
So relevant ministries and other agencies need to address this, he said.
The central bank’s monetary and credit policies would continue to both ensure the safety of the banking system and drive economic growth, he promised.
Credit to the property sector would be based on feasibility, prompt repayment capacity and meeting demand for housing for immediate occupation and not speculation, he said.
One of the solutions proposed by real estate firms at the meeting was rollover of debts.
According to the association, this will prevent them from being labeled as defaulters and help them access credit to complete unfinished projects.
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