Real estate credit growth slows down
A property project. The growth of outstanding loans for the real estate sector has slowed down over the past two years due to the Covid-19 pandemic - PHOTO: VNA
HCMC - Outstanding loans for the real estate sector grew 4.84% in the first four months of this year and are expected to expand 5.5% by June, lower than the figures recorded in the previous years, according to the State Bank of Vietnam (SBV).
At a press conference on June 21, Nguyen Tuan Anh, head of the Department of Credit Policies for Economic Sectors at SBV, said in 2018, loans for the property sector rose 26.76% versus 2017, but the rate fell to 21% in 2019 and 11.89% in 2020.
He attributed the fall to the impact of Covid-19, leading to a decline in investment activities.
As the prices of real estate products, especially land lots, increased in March and April, the central bank kept a close watch on the market.
Anh assessed the real estate sector was still risky, so the competent agencies must not be heedless in controlling credit for the sector.
As for the securities sector, Anh said the outstanding loans for it were estimated at VND46.7 trillion by June, equivalent to the figures by the end of April and May. However, the central bank will continue tightening its control over credit for the sector due to fluctuations in the stock market over the past six months.
Banks’ investment in corporate bonds reached VND257.7 trillion, which was not too high. However, the investment in corporate bonds is also sensitive, so the central bank will focus on managing these activities, Anh added.
By the end of this month, the investment in the sector was forecast to increase by some VND2 trillion.
SBV Deputy Governor Dao Minh Tu said the monetary, stock and property markets were linked with each other. Therefore, SBV would facilitate their development in a healthy and safe manner and prevent bubbles.
To reach the targets, Tu said the cooperation of management agencies such as SBV and the Ministry of Finance was needed.
SBV will regulate the interest rates in line with the market development and currency policies, and create conditions to reduce capital mobilization costs, thus removing the difficulties facing local residents and enterprises hit by the Covid-19 pandemic.
SBV also asked credit institutions to enhance control over the credit quality and work out solutions to control and limit bad debts.
The banking sector will closely control the credit for risky sectors, including real estate, BOT and BT traffic projects and securities.
Tu said 10 banks had proposed increasing their credit growth targets and SBV was still considering their proposals to ensure the credit growth quality.
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