An influx of credit into Vietnam's property market has raised concerns about potential risks, with outstanding real estate loans hitting a record high.
At a discussion session on October 28, many National Assembly (NA) deputies said it is necessary to adopt solutions to restore Vietnam’s corporate bond and securities markets as soon as possible, to ease the pressure on credit. In particular, the government needs to closely monitor interest rates at banks, so that sectors carrying out production and business can access credit at an appropriate cost.
Ms. Duong Thuy Dung, Senior Director of the Valuation, Research, and Consulting Department at CBRE Vietnam, said that more than 50 per cent of investors have problems with loans for real estate investment. If they continue to borrow, the cost will increase greatly. They want to sell but are unable to do so. If credit is not loosened by 2023, the real estate market will see a sell-off and prices will fall.
The State Bank of Vietnam (SBV) has officially adjusted the credit limit for four banks - Vietcombank, HDBank, MB, and VPBank - in a bid to support weak credit institutions under government policy. An additional VND83.5 trillion ($3.49 billion) will be injected into the economy following the move. The credit growth limit at 18 banks has now reached 13.6 per cent.
A negative deposit-credit gap and the State Bank of Vietnam’s withdrawal of money have tightened liquidity in the banking system. Interbank VND rates have skyrocketed. The overnight interest rate on October 4 was up to 7.74 per cent per annum, or 2.58 percentage points higher than in the middle of last week. Deposit interest rates are expected to continue to increase in the near future.