Distortion correction is not growth restriction

At the ongoing National Assembly session, delegate Le Thanh Van – Delegation of the National Assembly of Ca Mau province – said that the real estate market plays an important role in the economy. However, tighten credit with real estate may lead to consequences such as the market stagnation, the poor, especially the urban poor, it is difficult to buy cheaper houses as desired.

Meanwhile, the state’s purpose is to fight speculation and real estate bubbles. In fact, there are many real estate businesses that do business seriously and legally. What solutions does the governor have on monetary policy to ensure the healthy development of the real estate market, she asked.

Responding to delegates, State Bank Governor Nguyen Thi Hong said that the real estate market consists of many subjects, attracting many different investment sources. Credit is a channel to participate in real estate investment. In recent years, the State Bank has advocated that credit expansion must go hand in hand with safety and efficiency; focus capital on production and business and limit capital in potential risky areas.

The real estate sector has a risk that it is easy to lose capital. To prevent, banks only lend when customers qualify, ensuring the ability to repay. The nature of real estate is a large asset with a long term while the deposits of the banking system are short-term. If the lending credit institution cannot control it, there is a time when customers come to withdraw money but cannot recover long-term debts.

“Also lend to the investment sector real estate business This is done by credit institutions themselves agreeing with customers and deciding, on the basis of ensuring the safety of their own operations,” said Governor Nguyen Thi Hong.

The State Bank has issued regulations and directed credit institutions that, when lending, with secured loans, they must regularly reassess assets to identify risks; especially, with credit institutions lending with collateral, and those collaterals are located in areas where real estate prices are bubble and very high, credit institutions have to be even more careful.

For the need to buy a house to live in or for repair, in fact, according to the banking system’s data, there is VND 2.2 million billion of real estate debt at the end of 2020; of which, 65% are loans to buy houses to live in and buy houses to repair and serve for consumption purposes.

For the need to buy houses for low-income people, we currently have policies, such as Decree 100, which has made loans through the Bank for Social Policies. In the package of 2% interest rate support, there is also a need for a loan to provide loans for social housing, houses for workers and renovate old apartments according to the review of localities and the Ministry of Construction to synthesize.

Regarding the issue of real estate credit, National Assembly Chairman Vuong Dinh Hue assessed that the operators confirmed that they did not tighten the bond, securities and real estate markets. But in the first 5 months of this year, this market slowed down, it was very difficult for investors to raise capital.

“We inspect, check and monitor from afar, but it is very bad to ‘lose the cow to build the barn’. But if there is a case of losing cows and not daring to rebuild the barn, it is even worse. “, he said.

The National Assembly Chairman noted that the markets are transparent, so on one hand, the management agency must closely supervise and manage, but on the other hand, it must also create a market for development. “We should correct distortions of the market, not limit its development. Therefore, financial and economic policies must be consistent, smooth, and avoid jerks,” he added.

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Real estate credit tightening: Should not be extreme, need to be cautious and cleanMassively tightening real estate credit is a non-purifying equivalence. The sudden tightening caused many projects to be unfinished, businesses could not pay their loans, and banks faced the risk of bad debts.