Local banks give up

Tran Bang Hai, who lives in Go Vap district in HCM City, said that he planned to borrow VND400mil from banks to buy an apartment, but three banks he had contacted all refused to give loans.

Tran Thi Kieu in district 10 also complained that she cannot borrow money from banks to buy a luxury apartment. Bank officials said that the bank still needs to check if she buys the apartment for accommodation or just for speculation before deciding whether to loan her the money.

In fact, several banks have resumed real estate loaning, but they only give loans in dribs and drabs. Only loyal clients can access bank loans, while individual clients seem to have no way to get bank loans.

Dang Van Thanh, Chairman of Sacombank, said that it would be very risky to use short term capital for long term loans, while real estate loaning is a kind of long term credit. Therefore, Sacombank, though having profuse capital, still limits real estate loaning.

According to Tran Anh Tuan, Director of the HCM City Housing Development Bank, his bank follows very strict policies in funding real estate purchase deals in order to limit lending to speculators. The bank only provides loans to the projects that get investment licenses already.

Meanwhile, Asia Commercial Bank (ACB) only gives loans to help buy land for building urban areas and industrial zones, or repairing houses.

Foreign banks jump in

Several foreign banks and foreign investment funds have jumped onto the bandwagon. Prudential, an insurer, through its fund management company and finance leasing company has announced the programme on lending to the clients who have permanent and long term residential registration books.

All the clients, who have the monthly income of VND4,8mil and higher, can access the loans with no mortgage assets.

HSBC and ANZ, the two well known foreign banks in Vietnam, are now also planning to conquer the market of funding individual house purchase deals. French BNP Paribas has joined forces with Orient Bank to provide real estate credit.

Most recently, IFC has loaned VND300bil to Sacombank to help the bank carry out the programme on funding house purchases and repair deals with preferential interest rate.

Foreign investment funds, with powerful financial capability, are ready to replace domestic investors to develop potential real estate projects. VinaCapital, for example, has successfully gained a project on eco-tourism urban area in Dong Nai province, and bought back a project on luxury apartments in the centre of district 3, HCM City. Indochina Capital has been injecting money in a lot of good real estate projects in Da Nang and Hoi An.

Source: VTC