Banks start lending again to property sector
Banks start lending again to property sector
Local banks have started to make lending available to property developers and homebuyers, on certain conditions, after a long time closing their credit valve.
Pham Linh, deputy CEO of Oriental Commercial Joint Stock Bank based in Ho Chi Minh City (HCMC), says lenders now return to the property market and eye developers which offer discounts to their customers.
“Banks will only fund those who can rapidly complete their projects and offer affordable prices to customers so that they can quickly recover their capital,” Linh says.
Than Quy Phai, board chairman of a state-owned property firm, says that a few lenders are willing to provide loans to those developers whose projects are nearly finished.
The Vietnam Bank for Investment and Development, Phai points out, is committed to lending to his firm which is building Au Co Tower in Tan Phu District, HCMC, at 14.5 percent annual interest.
The tower is expected to be completed at the end of this year, the chairman adds.
Another developer which is constructing Bay Hien Tower in neighboring Tan Binh District says a bank has agreed to supply credit to it, relative to the speed of the building process.
Likewise, Lilama – SHB which is based in Da Nang City, says banks have pledged VND720 billion ($34.6 million) for two of its projects after a long pause of lending provision.
Lenders are also disbursing VND2.8 trillion ($134 million) credit to three projects owned by Duc Khai Corporation in HCMC, according to board chairman Pham Ngoc Lam.
One the buying side, loans are currently more accessible to purchasers as lending institutions open their wallets at lower rates.
HD Bank and VIB Bank, for instance, offer lending to buyers at 8.6 percent and 9.9 percent per year, respectively, for the first three months of a loan term.
Likewise, Maritime Bank says it lends at even softer interest, 6.8 percent a year for the first three months and 15 percent from the fourth onward.
A more or less 20 percent rate used to be the norm for home loans.
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