HCM CITY — The Construction Ministry has proposed to the Prime Minister that measures must be taken to control capital flows into the property market to prevent speculation.
Deputy Minister of Construction, Nguyen Tran Nam, said implementation should be cautious to avoid causing a stagnant market.
"It is necessary to stabilise the market so as to avoid high inflation and an economic bubble," he said.
The ministry said the Government should continue to reduce the number of loans to urban areas, high-rise apartment building projects and office condominiums for lease, as well as loans for site-clearance compensation.
It should increase the proportion of loans for new factory infrastructure to serve businesses as well as loans for residential housing. Loans for completed or nearly completed projects should also be given to increase liquidity for products.
Nam said the Construction Ministry and the State Bank of Viet Nam were considering excluding the real estate sector from the non-productive sector, which is burdened with credit rules.
If credit policies became more flexible and interest rates more stable, and more cash flow was put into the market with high liquidity, buyers would be more trusting, and the property market would recover more quickly, he added.
The country's socio-economic development would develop strongly if the property market is strong.
In Viet Nam, property demand is high, with real estate loans now accounting for a small percentage of the total outstanding loans of banks.
Commercial housing transactions are currently quiet, but he considers that to be temporary.
A risk of a bubble and collapse is very low, according to Nam.
However, he said credit organisations could face risks if they continued to sponsor infeasible projects and luxury buildings that have low liquidity.
He also gave a warning against the credit organisations that issue corporate bonds but in reality offer property loans.
When the market is frozen for a long time, businesses cannot sell their products, and the risk of losing money is high. This practice has also led to instability in the financial system and the economy.
He also said the collapse of "black credit" in recent months should also serve as a warning to banks.
After some commercial banks stopped giving property loans, individuals and companies began to illegally offer credit at very high interest rates for those in need of money.
But many people, including real estate investors, fell into major debt and bankruptcy. — VNS