The Phat Dat Real Estate Development JSC has announced that it will issue 1,500 bonds worth VND150 billion ($6.41 million) for the second and third quarter this year. Previously, the company had already issued bonds three times worth a total of nearly VND850 billion ($36.35 million). All four issues have interest rates ranging from 10.5 percent to 14.5 percent.

Many other real estate firms have also issued bonds in the first half of this year. The Nova Group issued VND400 billion ($17.1 million) worth of corporate bonds in two waves with an interest rate of 11 percent, while the firm Van Phu-Invest issued bonds worth VND800 billion ($34.21 million) with an interest rate of around 12 percent.

The firms are pushed to do this after banks tightened lending to the real estate sector, increasing interest rates and imposing stringent conditions for disbursement.

According to a recent draft circular prepared by the State Bank, loans for buying houses worth more than VND3 billion (more than $128,200) will apply risk coefficient of 150 percent, three times higher than the current ratio.

Growth of credit for the real estate sector was reported to slow to 8.56 percent in 2018 from 12.86 percent in 2016.

Nguyen Tran Nam, chairman of the Real Estate Association, said banks have been the main source of capital for Vietnam's real estate industry. If the State Bank tightens credit further, enterprises will have to look to other channels like shares and bonds to attract capital. There are only 65 out of over 10,000 real estate enterprises listed in the stock market.

According to a recent report by MB Securities Joint Stock Company (MBS), since the beginning of the year, there have been over VND60 trillion (nearly $2.57 billion) of corporate bonds issued. 

Real estate, construction and infrastructure sectors ranked second in terms of bonds issued in the country, accounting for 27 percent at VND16.23 trillion ($694 million).