Vietnam's Real Estate Market Faces Credit Squeeze: Ministry Urges Policy Adjustments

Strategic Insights -

The domestic real estate market in Vietnam is facing severe difficulties due to the credit-tightening policy implemented by the State Bank of Vietnam, resulting in a significant shortage of capital for many projects. The Ministry of Construction has submitted proposals to the SBV to adjust monetary policies, citing the need to enable the domestic real estate project to develop. The proposals suggest reducing the proportion of loans in certain sectors, prioritizing lending to individuals buying houses, and construction of infrastructure for production and trading activities.

Key Takeaways:

  • The Ministry of Construction has submitted proposals to the State Bank of Vietnam to adjust monetary policies to address the credit squeeze affecting the real estate market.
  • The credit-tightening policy has resulted in over 200 industries and branches being affected, with many enterprises involved in steel, cement, bricks, tiles, grass, and wood having to cut production due to a lack of construction projects.
  • Contractors, particularly small ones, have fallen into unemployment as construction projects have come to a halt due to a shortage of capital.
  • Several steel enterprises have seen their sales drop by 50% compared to the same period last year, with each worker at the Pomina company working only for 10 days a month.
  • Projects working on buildings for low and medium-income earners should not be subject to the credit tightening policy, as they serve people's housing demand.
  • The central bank should develop specific criteria to identify unproductive and productive real estate projects to ensure that credit is dispensed properly.
  • Separating real estate investors and speculators is crucial to ensure that credit is dispensed properly.

Statistics:

  • More than 200 industries and branches have been affected by the real estate credit squeeze.
  • Sales at several steel enterprises have dropped by 50% compared to the same period last year.
  • Each worker at the Pomina company is working only 10 days a month due to reduced production activities.
  • Many factories have reduced their production activities or even closed due to a lack of construction projects.

Sources:

  • Vietnam News Agency (VNA)
  • Ministry of Construction, Vietnam
  • State Bank of Vietnam
  • Vietnam Young Entrepreneur Association
  • Thep Viet Joint Stock Company (Pomina)
  • Hoa Binh Real Estate Trading and Construction Joint Stock Company
  • Small - and Medium-sized Enterprises Association