PM warns against unreasonably tightening lending to property sector

By Duc Minh   July 15, 2022 | 03:00 am PT
PM warns against unreasonably tightening lending to property sector
Prime Minister Pham Minh Chinh speaks at a conference July 14, 2022. Photo by Nhat Bac
Prime Minister Pham Minh Chinh has called for "flexibility" in providing credit to the property sector.

The industry plays an important role in stabilizing the economy, controlling inflation and promoting growth, and so it is imperative to develop it in a safe and sustainable manner, he said at a conference Thursday.

He called on the State Bank of Vietnam to be flexible in monitoring, managing and restructuring loans given to the sector to mitigate risks and to instruct banks to keep funds flowing into viable projects.

The central bank had said earlier it restricts lending only to projects with high risk of speculation and price manipulation, but encourages lending to social housing projects and for upgrading old apartments.

Loans outstanding to the property sector were worth VND2.33 quadrillion ($99.4 trillion), up 12 percent from the end of 2021 and accounting for 20.66 percent of total loans.

Ministries suggested at the conference the government should use taxes as a tool to regulate the property market.

Minister of Construction Nguyen Thanh Nghi called for overhauling tax regulations saying they fail to distinguish between investors and regular homebuyers.

Minister of Planning and Investment Nguyen Thi Bich Ngoc agreed, saying taxation could be used to reduce speculation, and called for amending the Law on Housing and the Law on Real Estate Trading.

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