Banks Clamour to Provide Housing Loans in Vietnam

Vietnam real estate properties market is again on the rise as the younger generation has seen an explosion of economic times in the country's largest cities like Hanoi and Ho Chi Minh City.

Hanoi - Banks are in a race to offer home loans on the back of rising demand for real estate property that sees consumers not only buying new real estate but also refurbishing their current residences.

Asian Commercial Bank (ACB) expects to increase the maximum an individual is allowed to withdraw without a mortgage to VND200 million (US$12,500) at 1.1 - 1.15 per cent interest rate per month, said Bui Tan Tai, director of the bank's Indidivudal Consumer Division. All that clients have to do is prove their ability to repay the real estate loan based on their monthly incomes.

ACB is one of the local pioneers in offering home loans without consumers having to take out a mortgage, and plans to offer more non-mortgage based financial services for clients in the mid to upper middle income bracket.

Orient Commercial Bank (OCB), Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) and Sai Gon Thuong Tim Commerical Bank (Sacombank) are also focusing heavily on the home loan real estate market as people mirgrate to urban centres for work, increasing demand for apartment units.

In comparison, these banks are willing to finance up to 70 per cent, or between VND800 million to VND2 billion, of an apartment's value, with instalments made over 15 - 20 year period.