Real estate debt of more than 2.8 million billion VND

The figures were provided by the State Bank in a recent report sent to the National Assembly's thematic supervision delegation on the implementation of legal policies on the real estate market and social housing development in the 2015-2023 period.

Regarding the credit situation related to the real estate market, the State Bank said that credit growth in the 2015-2023 period increased rapidly.

In 2015-2016, outstanding real estate credit was only about 400,000 billion VND, the real estate bad debt ratio was about 4.2%.

But in the following years, real estate lending increased rapidly. In 2017, the total outstanding loans for real estate and construction business of the banking system increased to VND529,000 billion, an increase of 9.21%, and the bad debt ratio for real estate also increased to 4.58%.

Also according to the State Bank, from 2018 to present, outstanding debt for the real estate sector, including real estate business and consumption purposes, and real estate self-use, has always increased.

In 2019, real estate loans increased dramatically by 23.26%, reaching 1.6 million billion VND. During the 2020-2021 pandemic, real estate outstanding loans still increased by 12.06% and 15.7% annually, respectively.

Then, in 2022, real estate debt increased sharply again, reaching VND 2,580 trillion, up 23.91% over the same period last year.

In 2023, real estate loans will continue to increase by 11.81%, reaching VND 2.88 million billion.

The State Bank said that the outstanding credit ratio for real estate is mainly medium and long-term debt. In the period of 2015-2023, credit for the real estate sector accounts for 18-21% of the total outstanding debt in the economy.

To control the flow of money into real estate, the State Bank has issued Circulars 36, 22, and 41 in recent years, stipulating the ratio of capital mobilized for medium and long-term loans of banks from 24-34%.

Regarding guarantees for the sale of future houses, according to the State Bank, in the period 2015-2023, credit institutions have committed to guarantee about 307,000 billion VND.

As of December 2023, the outstanding balance of loans issued to home buyers is about 35,600 billion VND.

Besides, credit institutions are buying about 191,400 billion VND of corporate bonds as of December 2023.

Assessing the credit situation related to the real estate market, the State Bank stated that real estate projects often have long capital recovery periods, while the capital sources of credit institutions are short-term, so credit institutions face risks when lending.

Some credit institutions have a high ratio of real estate credit to total outstanding debt, which poses potential credit risks.