The State Bank of Vietnam (SBV) has decided to increase the credit growth rate limit by 1.5-2 percent this year. The capital will be poured into production and business, especially agriculture and rural development, exports, small and medium enterprises (SMEs) and supporting industries.

The central bank has also instructed commercial banks to facilitate lending to people to fund their purchase of social housing products.

The HCM City Real Estate Association (HOREA) Chairman Le Hoang Chau said the additional capital would be provided to production and business in the high season in December and the days before Lunar New Year 2023. 

This is important as the real estate market, businesses, real estate buyers and real estate investors now find it difficult to access official credit. Many businesses lack or have low liquidity because of capital shortages.

Chau said that the additional capital will have a positive effect on the corporate bond market, helping it overcome  difficulties to become an important capital mobilization channel to ease pressure on credit institutions, so that's latter focus on their core function of providing working capital to the economy.

However, no more than 30 percent of short-term mobilized capital (deposits) for medium- and long-term lending will be used as per the roadmap on gradually reducing credit in risky business fields such as securities and real estate.

“This is not money to ‘rescue’ the real estate market or real estate firms. The State just gives support through policies and laws, so that the real estate market can correct and regulate itself, in association with some demand stimulus measures, such as giving direct support to people to buy houses at reasonable interest rates,” Chau said.

Phan Duc Toan, CEO of EZ Property, while affirming that lifting the credit room is a positive sign, thinks the effects of the new policy on the real estate market will not be significant.

“Investors, including ones with a lot of money, are very cautious when injecting money into real estate,” Toan said.

HOREA has asked the government and National Assembly Standing Committee to allocate a budget for an interest rate subsidy program, under which commercial banks lend money to people to buy houses for accommodations. 

Social housing products have recommended prices of no more than VND1.8 billion.

Hong Khanh