A number of participants at a March 15 conference on the influence of amendments to Circular No. 36 regarding real estate lending said that such amendments may affect both the banking and property sectors.

Mr. Dinh The Hien, an economic expert, noted that major property companies will not worry about accessing bank loans but will worry about market behavior, as customers might become anxious, which will affect liquidity.

According to Mr. Bui Quang Tin from the University of Banking, the draft amendments aim at keeping the property market stable and to help prevent banks from incurring risks when granting credit to real estate activities.

He added, however, that sudden changes resulting from the implementation of the amendments would affect banking and property sectors alike, as banks would not have enough money to lend after reducing the maximum ratio of short-term funds used on medium- and long-term loans from 60 to 40 per cent as required by amended Circular No. 36.

According to Mr. Dinh Duy Trinh, General Director of Ban Viet Land, many property projects will be terminated due to a shortage of capital resulting from the amendments, which direct increases to risk ratios for receivables from real estate operations from 150 per cent to 250 per cent.

This view was shared by Mr. Vu Quang Phan, Deputy Director of the Housing and Real Estate Market Management Agency, who said that the risk ratio on property loans would be higher, making even capable banks hesitate to offer credit.