The announcement has recently become a controversial topic. In this week’s Vietnam in Close Up, we listen to an expert from real estate services provider CBRE on the issue but first, let’s take a review of recent developments in the real estate market.
In February 2015, the State Bank of Vietnam’s Decree 36 on capital adequacy and liquidity requirements for credit institutions officially took effect. It contributed to a 26% growth of credit for real property in 2015. Fearing that fast growth could lead to another real estate bubble, the State Bank is planning to amend Decree 36. Specifically, the limit on using short-term funds for medium and long-term loans will be lowered from 60% to 40% for banks and foreign bank branches and from 200% to 80% for non-bank financial institutions. The credit risk ratios for receivables from real estate activities will also increase from 150% to 250%. These amendments critics claim, could reduce accessibility to loans and raise borrowing costs.
Although 2015 witnessed a strong recovery of the Vietnamese real estate market, 50% of transactions were in the high-end segment. Meanwhile, projects of the mid-and-low-end segments and social housing have tended to fall despite huge demand. Experts claim that not all market segments have fully recovered from the pre-crisis levels.
