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“Are we growing, and on what foundation? Is that foundation strong enough to support the goal of double-digit growth?” Deputy Le Hoang Anh of Gia Lai said at an economic-social discussion at the National Assembly on the morning of April 21.
Le Hoang Anh said private investment in Vietnam relies on bank credit for about 80%, while loan interest rates remain high. In his view, this cost structure pushes capital toward sectors that can bear high borrowing costs—typically those with high profits or asset speculation—creating broader economic consequences.
The deputy said a large share of credit flows into real estate speculation. He cited that housing prices in Hanoi and Ho Chi Minh City are about 25–30 times the average annual income, compared with what he described as healthier international practice of 4–6 times.
He argued the outcome is a credibility and social fairness issue: “Young people working hard for 30 years cannot buy a house, while those who inherit land own a piece of land. This leads to a loss of faith in a fair system,” adding that it is not only an economic issue but also a long-term political-social one.
Based on credit balance data of all 35 commercial banks provided by the National Assembly Library, Le Hoang Anh said he is “particularly worried” by the pace of real estate lending. He reported that real estate credit rose 132% over four years, from 1,955,000 billion dong in 2021 to 4,541,000 billion dong in 2025—about 2.4 times the pace of industrial growth.
He further noted that in 2025, real estate credit was 1.81 times industrial credit and 5.3 times agricultural, forestry and fishery credit. In addition, he said real estate does not generate export value or sustainable jobs; in 2025, real estate and construction together accounted for 27.4% of total system credit.
Le Hoang Anh also cited growth rates: from 2024–2025, real estate credit surged 37.6%, while industrial credit rose 9.4%.
Using a “marathon with tied legs” analogy, he said Vietnam is running with capital trapped in asset speculation rather than flowing to areas that create real value. He proposed using market tools to control speculative real estate credit rather than administrative orders.
He also called for mandatory reserves differentiated by sector so that credit moves toward production and technology. In parallel, he proposed implementing land-use fees immediately based on economic efficiency and the time land is put into use.
At the same time, he proposed that the National Assembly include in the Capital City Law at this session and, by year-end, implement the Special Urban Law for Ho Chi Minh City. The deputy suggested rules under which “land on a stalled project for more than 24 months must bear increasing fees over time,” and that second-hand real estate or land not used or rented should face progressive fees.
He said revenues from these measures should be directed to a Social Housing Fund, remediation of old apartment blocks, and essential urban infrastructure. “This is a solution that hits the motive of speculation and forces land back to its real-use value, creating room for real growth,” he stated.
In the same discussion, Deputy Nguyen Ngoc Son of Hai Phong said the main difficulties in the real estate market still stem from institutions, planning, investment procedures, land price determination, compensation and resettlement, and project approval timelines.
He said lawful supply remains blocked while speculation and rumors about planning, as well as land auctions, continue to create a price illusion, making it difficult to stabilize the market.
Son proposed clarifying more concrete solutions to cool overheated price levels, particularly how to balance market stabilization with the fact that many localities still rely on land revenue from auctions.
He also called for thorough assessment and concrete solutions for real estate projects with findings by inspection agencies and courts, including projects that have stalled for years.
“Publicize information and promptly have mechanisms to review all projects; classify each project; those that qualify should continue with clear deadlines for completion; projects that lack capability or intentionally stall should be strictly recovered, re-bid, re-tender, or repurposed,” Son proposed.
Le Hoang Anh also raised concerns about low ICOR, which he attributed to broad spending, many projects that are nearly complete but not yet used or generating benefits, weak investment preparation, neglected before-and-after effect evaluation, high informal costs, and delayed debt allocations.
He cited the Pleiku–Qui Nhon highway project as an example: Parliament decided on it, but the investor requested 9,100 billion dong in 2026, which he said has not yet been allocated.
In his assessment, “ICOR is high not because of lack of capital but because there are too many projects, a lack of discipline, a lack of accountability for results. Injecting more money into a poorly managed system simply increases ICOR.”
He said the government should cut at least 30% of projects to align with the principle of cutting underperforming projects while keeping those with high spillover effects.
He also argued that accounting should reflect the nature of each project rather than applying a single criterion across the board. He proposed that output commitments be treated as a legal obligation similar to financial commitments in loan contracts.
He further proposed digital transformation of public investment management in real time, including dashboards to monitor progress, disbursement, and forecast overruns, and to ensure coordination among the investor, the Treasury, and the State Audit.
“Emphasizing that the goal of two-digit growth is feasible, but only if we reform properly, not by injecting more money into the old system, not by issuing additional documents; we must change the mechanism for capital allocation and ensure every dong of investment proves its value,” Le Hoang Anh concluded.
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