State bank's new circular facilitates lending to real estate projects

Hanoi – The State Bank of Vietnam (SBV) and the banking system always create favourable conditions to support real estate businesses and the property market to develop strongly and sustainably, said Pham Chi Quang, Director of the SBV’s Monetary Policy Department.

The SBV's Circular No.06/2023/TT-NHNN amending and supplementing a number of articles of Circular No. 39/2016/TT-NHNN dated December 30, 2016, which will take effect from September 1, does not contain any regulations prohibiting credit institutions from providing loans for real estate projects, Quang said.

According to the official, the scale of outstanding loans in the real estate sector has increased steadily over the years, reaching 2.7 quadrillion VND, accounting for 21.63% of the total outstanding loans of the economy.

The new circular’s regulations are expected to contribute to supporting investors of real estate projects in complying with legal regulations related to the real estate sector, establishing a foundation for the secure and sustainable development of the property market, and safeguarding individual investors who purchase properties and homes.

By eliminating certain restrictions and introducing new regulations, the document aims to create maximum favourable conditions for customers to access bank loans, Quang said.

In the circular, the SBV also added regulations, allowing credit institutions to lend customers for repaying loans at other credit institutions, applicable to consumer lending activities, including purchasing homes.

This will provide favourable conditions for customers, especially those borrowing for buying homes and real estate with lower interest rates and improved services, Quang stressed.

Mergers and acquisitions between domestic and international real estate developers were down in the first half of the year, but could be a future bright spot with Vietnam boasting attractive economic fundamentals and investors biding their time.

More effective solutions are being called for to pave the way for new supply and access to buy property.