The bank said lower interest rates, which have been expected to prevail throughout this year, will likely result in a speedy recovery for the market.

In a recent report by the SBV, credit for the market accounted for about 26% of the total outstanding loans last year. As a result, the lending rates for the market in commercial banks including HDBank, Techcombank, VPBank, SHB, MSB, MB, and TPBank increased compared to the end of 2022.

Techcombank had the highest proportion of lending for property development activities, with 35.22% as of December 31, 2023, compared to 26.44% in the same period in 2022. VPBank ranks second with a proportion of property lending at 19%, compared to 14.39% at the end of 2022.

VietBank also recorded a 19%, but this rate decreased by 1 percentage point compared to the end of 2022. Some other banks also saw a surge in the proportion of property lending, such as SHB increasing from 8.33% to 15.45%; and MB increasing from 4.91% to 7.49%.

MSB recorded a slight increase from 8.75% to 8.96% of total outstanding loans, TPBank rising from 6.31% to 7.12%, while this rate at Saigonbank remained unchanged at 6%.

According to the report, credit growth in 2023 was recorded at 13.5%, reflecting the banking sector's effort to support the property market. The central bank said it has set a credit growth target of 15% for the year 2024.

VNDirect Securities Company said the gradual easing of "bottlenecks" will help the market recover from the second half of 2024. The security firm said the reduced interest rate will give developers more room in terms of capital, and support housing demand. VNDirect also expects the net profit margin of developers to recover in the coming quarters.

Consumer credit continued to decline, however, reflecting buyers' caution. The mortgage interest rate was reported at 11%, down from its peak of 13-14% in recent years.

"The decrease in interest rates is expected to improve the demand for houses, which strengthens developers' ability to maintain a healthy cash flow. We believe that the residential market has passed the most difficult period and will show clearer signs of recovery from the second half of 2024," said a VNDirect analyst.

To stimulate credit flow into the market, developers said the banking industry should be more flexible regarding credit conditions. Specifically, it could further simplify documentation requirements, shorten approval times, and grant credit in less than one month.

In addition, they called on the Government to extend the restructuring period for loans by allowing the use of 34% of short-term capital for medium- to long-term loans (instead of reducing it to 30%) and extend loan periods for industries directly related to the market./.VNA