Recent data released by the State Bank of Vietnam (SBV) shows an upward trend in housing credit as the real estate market gradually stabilizes and shows signs of recovery. This trend is particularly evident in Ho Chi Minh City, Vietnam’s largest economic center.

According to a report from the SBV’s Ho Chi Minh City office, the total outstanding credit for the city’s real estate market has exceeded 1 trillion Vietnamese dong (approximately $40 million), accounting for 27.6% of the total outstanding credit in the region’s banking system. This figure represents a 5.5% increase compared to the end of last year. Notably, Ho Chi Minh City achieved an overall credit growth rate of 3.9% in the first seven months of 2024.

Within the outstanding credit for the real estate market, housing credit dominates, including social housing, commercial housing, and other categories, accounting for a high 57% of the total. The growth in social housing credit has been particularly significant. According to data from the SBV’s Ho Chi Minh City office, social housing credit has reached 2.54 trillion dong since the beginning of this year, showing a remarkable growth rate of 78%.

In addition to housing credit, other real estate-related loan applications have also shown strong growth momentum. These loans cover various sectors including industrial parks and infrastructure, office buildings, restaurants, hotels, and tourist areas. Specifically, in the first seven months of 2024, loans for industrial park and infrastructure development reached 48.39 trillion dong, an 18.4% increase compared to the end of last year. Office building loans reached 24.04 trillion dong, growing by 14%.

Nguyễn Đức Lệnh, Deputy Director of the SBV’s Ho Chi Minh City office, analyzed the reasons for the sharp rise in credit. He pointed out that this is mainly due to the financial system accelerating the disbursement of social housing credit. Since the beginning of this year, about 170 billion dong from the government’s 120 trillion dong social housing credit program has been used for a workers’ housing project in Thu Duc City, a satellite city of Ho Chi Minh City.

Deputy Director Lệnh emphasized that the housing market credit is still dominated by medium and long-term loans. He believes that an effective and sustainable growth model will have a significant impact on commercial banks’ credit management. He also pointed out that strict adherence to credit regulations, ensuring borrowed funds are used for their intended purposes, and the effectiveness of business operations can not only ensure safe and effective credit growth but also promote healthy development of the real estate market.

The SBV has requested all local offices to strictly comply with relevant regulations and carefully review loan applications to ensure credit flows to priority areas of economic development. At the same time, Deputy Director Lệnh emphasized that the government must implement corresponding policies to create a favorable environment for the sustainable development of the real estate market.

These data and policy trends reflect the latest developments in Vietnam’s real estate market and credit industry. The rapid growth of housing credit, especially the significant increase in social housing credit, indicates that the Vietnamese government is working to address livelihood issues, particularly in densely populated economic centers. Meanwhile, the growth in loans for industrial parks, infrastructure, and commercial real estate also reflects the overall development trend of Vietnam’s economy.

However, the rapid credit growth has also raised concerns about risk control. The SBV’s emphasis on strict compliance with credit regulations and prudent review of loan applications indicates that regulatory authorities are working to balance economic development and financial risks.

Key points:

• Housing credit in Vietnam is showing an upward trend, particularly evident in Ho Chi Minh City.
• Social housing credit has grown significantly, increasing by 78% since the beginning of the year.
• Loans for industrial parks, infrastructure, and office buildings also show strong growth.
• The SBV emphasizes strict compliance with credit regulations to ensure safe and effective credit growth.