Banks Witness Soaring Lending as Property Developers Seek Financial Support Once More

According to the State Bank of Vietnam, lending to property developers by banks has increased by 19% in the first seven months of this year, reaching VND980 trillion (US$40.07 billion). This growth rate surpasses the 10.7% achieved in the entire year of 2022. However, mortgages have experienced a decline of nearly 1.4% during the same seven-month period, totaling VND1,730 trillion.

The State Bank of Vietnam has stated that the increase in lending suggests that property developers have successfully resolved the legal issues surrounding their projects and are now seeking funding to complete them. This development is expected to contribute to an increase in housing supply.

Industry insiders have noted that property developers have turned to banks for financial support due to the severe impact recent events have had on the bond market. The central bank has also reported a rise in the bad debts ratio in the property sector, which increased to 2.58% in July this year from 1.8% in the previous year.