The State Bank of Vietnam (SBV), the country’s central bank has publicised the official statistical figures on real estate lending activities of the whole Vietnamese banking system in 2003–2005 period. Accordingly, the outstanding real estate loan balance in the reviewed period had continuously been surging with the average credit growth of 33% per annum.
The SBV figured the rate of real estate loans out of the total outstanding loans for the economy had surged from about 8% by the end of 2003 to about 10% by the end of 2005.
This figure of the real estate loans are estimated at about 50 trillion dong respectively. Of which, medium term loans made up about 79% of the total real estate loans and long-term loans were about 21% of the total loans.
The rate of medium and long-term loans for the country’s economy increased from about 18% by the end of 2003 to nearly 25% by late 2005. The ratio of bad property loans was estimated at about 2% of the loans.
State-run commercial banks accounted for about 80% of the total loans for real estate projects. However, this rate had decreased slightly in 2005 as the real estate market faced a slew of difficulties on development, even turned frozen. The outstanding real estate loan balance of banks in the five big cities of Hanoi, HCM City, Hai Phong port City, Can Tho southern City and Da Nang central City had accounted for about almost 70% of the total outstanding loans of the whole country in the reviewed period.
Particularly, HCM City, the country’s largest commercial centre accounted for 45% of the total real estate loans nationwide ranking the biggest real estate creditor.
Of the loans for real estate projects, outstanding loans for the demand for refurbishing and purchasing apartments and houses held the highest rate of over 40%, but this credit field has signalled a reduction over the past years.
Meanwhile, the outstanding loan balance for building new apartment buildings and villas for sale had increased respectively, from 7% by the end of 2003 to over 11% by June 2005.