VN to inject funds into property sector
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The property sector is expected to get a strong injection of credit in 2013 thanks to a resolution the government issued recently.
The resolution spells out a number of potential solutions to overcome difficulties faced by the business sector, revive the market, and resolve bad debts.
One of the measures urges the State Bank of Vietnam to direct state-owned banks to earmark a reasonable quantum of funds, equivalent to at least 3 per cent of their total loans, to help low-income earners, government workers and military personnel buy or lease houses. This amount is expected to be 20-40 trillion dong (Bt28.5 billion-Bt57 billion) and the credit will carry a moderate interest rate and for terms of up to 10 years. The central bank will provide refinancing.
People looking to buy houses of less than 70 square metres and costing 15 million dongs or less per square metre can get mortgages at low interest rates. Developers of social housing projects can also get credit at reasonable rates.
Tran Hoang Ngan, member of the National Advisory Council for Financial and Monetary Policies, said the new policies are likely to revive the low-priced apartment and housing segment. He suggested keeping lending rates for people with a real need for housing at 5-6 per cent.
Tran Bac Ha, chairman of the Joint Stock Commercial Bank for Investment and Development of Vietnam said that central bank policies should encourage banks to lend to house buyers. For one, these loans should not be grouped along with credit provided to property developers, he said.
These loans should be deducted to calculate banks’ compulsory reserves, he said. If these are done, banks can lower interest rates on mortgages and increase lending, he said.
Vo Van Chau, adviser to TrustBank, said the possibility of high credit growth in the housing segment is great this year as the central bank has lifted restrictions on loans to non-production sectors.
Tran Anh Tuan, general director of NamA Bank, agreed, but warned that banks should be cautious and monitor the quality of these loans since the housing market is still in a slump and risks remain high.
Tran Du Lich, from the National Advisory Council for Financial and Monetary Policies, urged developers to continue cutting the prices of their products to attract more individual customers and revive the market.
