A report from the HCM City’s SBV Office said the city’s total outstanding credit for the property market reached over VNĐ1 trillion (US$40 million), 27.6 per cent of the system’s total outstanding credit and an increase of 5.5 per cent compared to the end of last year. The city, Việt Nam’s largest economic driver, has also reported an increase in credit of 3.9 per cent during the first seven months of 2024.

In front of the HCM City’s SBV Office at 8 Võ Văn Kiệt Street, HCM City. —VNA/VNS Photo

Housing credit, including social housing, commercial housing and several other categories, accounted for a significant portion, at 57 per cent of the property market’s outstanding credit. Social housing credit reached VNĐ2.54 trillion, an increase of 78 per cent since the beginning of this year, according to the SBV’s HCM City office.

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 VNĐ48.39 trillion, and loans for office buildings reached VNĐ24.04 trillion, an increase of 18.4 per cent and 14 per cent, respectively, compared to the end of last year.

Nguyễn Đức Lệnh, deputy director of the SBV’s HCM City Office, 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 VNĐ120 trillion social housing credit package, estimated at VNĐ170 billion, has gone to a worker housing project in Thủ Đức 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.

Lệnh 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.