Door to open to housing credit

Under Resolution 02/NQ-CP dated January 7, 2013 state-owned commercial banks must set aside rational capital amounts, at least tantamount to 3 per cent of their total outstanding loans, to lend low-paid people, sate employees and people in the armed forces for lease and purchase of social and commercial housings.

The State Bank (SBV) envisages this capital amount would be VND20-VND40 trillion ($950 million-$1.9 billion) with a loan duration of 10 years.

Prospective homebuyers will enjoy low lending rates with suitable payment terms matching their budget in cases housings are less than 70sqm and fetch less than VND15 million ($715) per square metre.
Businesses building social housings or changing their projects into building social housings will be supported in getting loans with suitable interest rates and payment terms.

Member of National Financial and Monetary Policy Advisory Council Dr. Tran Hoang Ngan forecasted housing transactions would warm up after the SBV nailed down explicit credit policies to support this field. Ngan, however, suggested putting lending rates at 5-6 per cent, per year only to support individual home buyers.

BIDV chairman Tran Bac Ha proposed the State Bank work out suitable policies and mechanisms to encourage banks to expand lending to homebuyers. Accordingly, Ha suggested not including retail credit to homebuyers into property-oriented outstanding loans.

TrustBank advisor Vo Van Chau said housing lending would soar in 2013 after the SBV decided not controlling the rate of outstanding loans in non-productive area.

NamA Bank general director Tran Anh Tuan held the same view, adding that banks would be cautious and closely control property credit quality to rein in bad debts.

In reality, the property market remains stagnant and prone to risks.
Industry experts assumed this came on the back of imbalanced property structure with serious lack of small to medium-sized housing units.

“To break the current property market impasse, property firms need to further cut down prices to attract customers in parallel to softening lending rates,” said senior economist Tran Du Lich.