Hanoi (VNS/VNA) - Housing credit has been on the rise as the property market finds its footing and path to recovery, according to the State Bank of Vietnam (SBV).

A report from the SBV Branch in Ho Chi Minh City said the city’s total outstanding credit for the property market reached over 1 trillion VND (40 million USD), 27.6% of the system’s total outstanding credit and an increase of 5.5% compared to the end of last year. HCM City, Vietnam’s largest economic driver, has also reported an increase in credit of 3.9% during the first seven months of 2024.

Housing credit, including social housing, commercial housing and several other categories, accounted for a significant portion, at 57% of the property market’s outstanding credit. Social housing credit reached 2.54 trillion VND, an increase of 78% since the beginning of this year, according to the SBV Branch in HCM City.

Meanwhile, the number of loan applications, including for industrial parks and infrastructure, office buildings, restaurants, hotels, and tourist areas, has been growing strongly.

In the first seven months of 2024, loans for the development of industrial parks and infrastructure reached 48.39 trillion VND, and loans for office buildings reached 24.04 trillion VND, an increase of 18.4% and 14%, respectively, compared to the end of last year.

Nguyen Duc Lenh, Deputy Director of the SBV Branch in HCM City, a sharp rise in credit could be attributed to the financial system’s efforts in speeding up the disbursement of social housing credit. Since the beginning of the year, a part of the government’s 120 trillion VND social housing credit package, estimated at 170 billion VND, has gone to a worker housing project in Thu Duc City, one of HCM City’s satellites.

“Housing market credit remains primarily medium and long-term loans. An effective and sustainable growth model will have a tremendous impact on commercial banks’ credit management,” he said.

Lenh said that strict adherence to credit regulations and the intended use of borrowed capital, as well as the effectiveness of business operations, will not only ensure safe and effective credit growth but also promote the development of the real estate market.

✅ He said the central bank has instructed all local offices to strictly adhere to regulations and scrutinise loan applications to ensure credit is going to prioritised sectors of the economy. Meanwhile, policies must be implemented by the government to rear the market towards sustainable development./.