BizLIVE - Bad debt in the real estate industry stands at 4.06%, higher than the overall 2.34% reported by banks.
Sour Loans for Real Estate in Vietnam Fall to 4%: Central Bank
Bad debt in the real estate sector is falling amid a decline in inventories.
Non-performing loans (NPLs) currently account for 4.06% of total lending for the real estate sector in Vietnam, representing a significant decrease from 7.05% in 2013, data of the central bank shows.
According to the Credit Department under the State Bank of Vietnam, lending for the property sector increased 4% in the seven months through July 31, 2017, and accounted for some 9% of total outstanding loans in the banking system.
Amid concerns over an overheated property market and the potential return of an asset bubble, the central bank has affirmed it will closely monitor lending to real estate and take prompt actions to ensure its safety and effectiveness.
At an annual real estate forum in mid-November, a construction ministry official said that the local property market continued a stable path, in terms of both price and transaction volume.
The market is forecast to keep the current momentum and the affordable housing and hospitality real estate segments will likely see stronger inflows.
Real estate inventories have dwindled 16% from December 2016 to 26 trillion dong ($1.14 billion) presently.
Governor of the State Bank of Vietnam Le Minh Hung said in a Q&A session at the National Assembly sitting last week that NPLs registered on banks’ balance sheets accounted for 2.34% of total lending as of September 2017, down from 2.46% at the end of 2016.
The fully-calculated bad debt ratio would be 8.61%, down 1.47 percentage points from 10.08% identified for the end of 2016, Hung added.