Vietnam - Supporting homebuyers a lifebuoy to realty market

Offering homebuyers preferential loans is considered a solution to remove the current difficulties of the property market and improve the market liquidity.

This was given at the dialogue between property firms and members of the National Financial Supervisory Commission organised by the HCM City Real Estate Association (HoREA) in HCM City on Wednesday.

Vu Anh Tam, general director of Tai Nguyen Construction, Manufacture and Trading Company, said the local property market has been plunging in the last four years as trading moves flat in all segments and project owners are struggling with unsold products.

Given the sluggish liquidly of the market, no bank wants to give out loans to property firms, said Tam.

He stated the key point is to bring homebuyers to the market, through providing them with soft loans to buy houses. When the realty market turns rosy, construction, cement and steel sectors will also enjoy benefits.

Dang Hoang Vu, general director of Thanh Binh Real Estate Trading Co., shared Tam's view, saying instead of pouring capital into enterprises, the State should adopt policies to directly assist homebuyers.

Tran Dinh Thien, director of the Vietnam Institute of Economics, wondered if the government is capable of saving the troubled property market. He described the rescue as an art to inject an amount of money enough to stimulate the market.

With the latest move of the central bank, credit for property will be loosened. Particularly, property credit will be further extended with loans for all purposes such as buying houses to live or as an investment, and property development.

Meanwhile, instead of giving loans to realty firms to finalise their projects, the banks choose to offer loans with supporting interest rates to homebuyers.

ANZ Vietnam has slashed the lending rate to 15.5 percent a year for customers borrowing more than 500 million dong to purchase houses. Compared to last month, the interest rate of home loans has dwindled two percentage points.

Asia Commercial Bank (ACB) has also announced to use 1 trillion dong as home loans with the interest rate of 18-19 percent per annum. Most lately, following the central bank's decision to pull down the deposit rate cap to 12 percent, HSBC Bank has reduced the lending rate for house and car buyers by one percentage point, or to 17 percent.

Trinh Van Tuan, general director of Orient Commercial Bank (OCB), said supporting homebuyers is the safest way to revive the property market at present, since lenders often choose customers with stable income and proven repayment ability to give out loans. On the other hand, providing more loans to property developers is risky as it is unknown when the market will warm up.

Saigon Times

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