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The flow of credit is heavily directed into real estate, especially for speculative purposes. During the National Assembly’s discussion of the socio-economic situation and the state budget, a delegate proposed controls to curb speculative lending while prioritizing capital for production and value-added sectors.
On the morning of April 21, National Assembly delegates continued discussions on the socio-economic situation and the state budget. Delegate Le Hoang Anh (Gia Lai province), a member of the National Assembly’s Finance - Budget Committee, said credit flows have shown a long-term misalignment: the private sector relies heavily on bank loans, while high lending rates make it difficult for most businesses to sustain borrowing unless they operate in high-profit sectors or engage in asset speculation.
In that context, speculative real estate has become a major recipient of credit. Hoang Anh said the consequence is that housing prices in major cities have risen far above workers’ incomes.
Hoang Anh cited data showing that housing prices in Hanoi and Ho Chi Minh City are currently about 25–30 times the average annual income, while international norms are typically around 4–6 times. He said this gap makes housing access difficult for residents, particularly young people.
At these price levels, a worker relying only on accumulated income would need decades to buy a home; in some cases, even 30 years of work may not be enough to reach the target.
The delegate also presented figures indicating that real estate credit has grown rapidly in recent years. Over four years, credit to the real estate sector increased sharply at a pace much faster than that of the industrial sector. He noted that the 2024–2025 period saw a particularly high increase in real estate credit, while credit for production grew more slowly.
Hoang Anh argued that this pattern suggests resources are concentrating in assets with speculative characteristics rather than in sectors that generate added value, jobs, and competitiveness for the economy. He said inefficient capital allocation could affect the quality of long-term growth.
From this reality, Hoang Anh proposed measures to control credit to speculative real estate using market-based tools rather than rigid administrative measures. At the same time, he said there should be guidance to shift capital toward production and technology.
Among the proposals, he mentioned:
According to the delegate, these measures aim to curb speculation and return assets to serve real demand.
Deputy Nguyen Nhu So (Bac Ninh province) said the issue is not only the scale of credit but also the structure of the financial system. He pointed out a paradox: although the credit-to-GDP ratio is high, the economy still lacks medium- and long-term capital.
He attributed this to a maturity mismatch, with short-term funds from the banking system being used to finance long-term needs. This, he said, creates pressure on the system and makes capital harder to reach sectors with higher value-added potential.
As a result, capital is underutilized and the economy must use more resources to achieve the same growth. He therefore proposed policy adjustments to steer capital with clear objectives, prioritizing production.
Deputy Nguyen Nhu So also said reducing dependence on bank credit is necessary. He suggested developing the capital market, including equities, corporate bonds, and other long-term fundraising channels, to provide additional resources for the economy.
Source: Vien Minh / VTC News
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