Prime Minister Pham Minh Chinh, at a conference on the real estate market held recently, affirmed that Vietnam will not tighten real estate credit in an unreasonable or rigid way.

With Circular 22, which took effect on January 1, the State Bank of Vietnam (SBV) has laid a new block to restrict capital flow to the property sector.

There are two typical characteristics of the real estate firms’ race to issue bonds – the high amount of bonds issued and the high interest rates.

Real estate firms are seeking new sources of capital as commercial banks have tightened lending.

The credit growth rates of state-owned banks are decreasing, but rising at joint stock banks.

VietNamNet Bridge - Once banks restrict lending, this will affect the real estate market. However, experts believe that no negative impact on the market will occur.

VietNamNet Bridge - At most banks, loans provided to the real estate sector account for no more than 7 percent of their total outstanding loans, but the figures are above 10 percent at other banks.

The State Bank of Vietnam, in an effort to strictly control credit growth in the second half of the year, will take unscheduled inspection tours to banks that are pouring  money into the real estate sector. 

VietNamNet Bridge - The State Bank of Vietnam reports that loans disbursed to the real estate sector have soared recently. 

VietNamNet Bridge – A credit package worth VND120 trillion (US$5.7 billion) would help develop the local property market, said Phan Thanh Mai, general director of the Viet Nam Bank for Construction.