HCM City’s real estate credit grows by 12.3%

HCM City’s real estate credit grows by 12.3%

Lenders in HCM City reported outstanding real estate loans of VNĐ1.09 quadrillion (US$) last year, up 12.3 per cent year-on-year and making up 27.5 per cent of total loans, according to data from the central bank.

Real estate developments in Thủ Đức City in HCM City. Banks in HCM City reported outstanding real estate loans totaling VNĐ1.09 quadrillion last year, up 12.3 per cent year-on-year. — VNS Bồ Xuân Hiệp

Of this total, 66.6 per cent were for home purchases, renovations, new construction, and land use rights for residential projects. 

Loans for real estate businesses also grew significantly, with outstanding loans for industrial park infrastructure reaching VNĐ55 trillion (5 per cent of total real estate credit), an increase of 34.8 per cent. 

Outstanding loans in the office building sector totaled VNĐ25.8 trillion (2.38 per cent of the total), up 22.5 per cent from the previous year, while loans for restaurants, hotels, and resorts reached VNĐ26.5 trillion (2.44 per cent of total), a 31.7 per cent increase.

Nguyễn Đức Lệnh, deputy director of the State Bank of Vietnam's (SBV) HCM City branch, noted significant growth in real estate lending for business and production in 2024, driven by an expanding tourism and investment sector.

"This trend is positive for the economy," he said.

He added it was essential to continue to address challenges in the real estate sector, such as simplifying project documentation and legal requirements.

Lệnh also mentioned the role of preferential credit packages from commercial banks aimed at individuals under 35, which could further stimulate credit growth in the coming period.

The SBV reported that total outstanding real estate credit has, as of now, reached VNĐ3.48 quadrillion, up VNĐ590 trillion, or 20 per cent, compared to the end of 2023. 

Market recovery

Experts believe 2025 could be a crucial year for the city's real estate sector. After navigating the challenges brought on by the pandemic and economic downturn, a full recovery is anticipated by 2026. 

While 2023 was undoubtedly a tough year for the market, signs of recovery are emerging. 

Many projects are now resuming, developers are launching new initiatives, and investors are expressing renewed interest in the market.

According to the HCM City Real Estate Association (HoREA), the market faced negative growth throughout 2023, culminating in a 0.5 per cent decline. 

However, a notable upswing began in the second quarter of 2024, leading to overall growth of 9 per cent for the year.

Despite these positive signs, Lê Hoàng Châu, chairman of HoREA, cautioned that challenges remain, particularly concerning limited supply in the housing market, especially for affordable homes priced below VNĐ30 million per square metre, as well as in the social housing segment.

Experts stressed the importance of 2025 as the government and relevant agencies work to resolve legal issues affecting projects and introduce more housing options to the market. 

With an increase in supply, it is expected that home prices will gradually rise, making homeownership more attainable for a larger segment of the population, they added. 

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