Government meeting hears opinions on real estate credit growth and whether a property bubble may reappear.
There have been concerns expressed over the reappearance of a property bubble as the amount of credit poured into real estate increased nearly 11 per cent in the first five months of the year, double the credit growth to the entire economy, Minister of Planning and Investment Bui Quang Vinh told an interdisciplinary meeting summarizing the country’s economy in the first half.
State Bank of Vietnam Governor Nguyen Van Binh said that the real estate market has bounced back due to more capital being pumped into the sector. The property market also saw many projects and successful transactions.
“Credit is being focused on projects in which developers directly offer their products to end-users without intermediaries,” he added. In other words, credit is supporting real demand in the real estate market. “The risks of bad debts and a property bubble can therefore be partially controlled,” he said.
According to Minister Vinh, the recovery of the real estate market is a good sign for the growth of the sector and for the economy. “If credit continues to be poured into the property market, bad debts may increase,” he added. “So there should be more caution in managing credit to the sector.”
Positive signs in the market and confidence among homebuyers boosted the number of successful real estate transactions around the country during the first half of the year, according to the latest figures from the Vietnam Real Estate Association.
Hanoi recorded around 7,500 successful transactions in the first half, a 2.5-fold increase year-on-year. In Ho Chi Minh City, meanwhile, transactions in the first half were estimated to reach 7,050, for a 2.8-fold increase compared with the same period of last year.