Vice Minister of Construction, Nguyen Tran Nam, has recently proposed to establish a bank specializing in real estate development, the state-run online newspaper Vietnam Plus reported, citing its private source.

Funds to the property market have been suspended, Nam said, emphasizing that it is essential to solve the capital constraints for real estate businesses to continue their property projects and to recover public confidence.

However, according to Dang Hung Vo, former Vice Minister of Natural Resources and Environment, the establishment of a real estate bank at present is inappropriate and not a solution for unfreezing capital flows to the real estate market.

The biggest issue in setting up a real estate bank now is to find capital sources, Vo commented, adding that real estate businesses are all in much difficulty, and many of them are even on the edge of bankruptcy.

"In my opinion, this is not a good solution for the current capital constraints," Vo said.

In addition, Pham Thanh Hung, Deputy CEO of the Century Real Estate Group (Cen Group) raised question on the feasibility of forming a real estate bank at this time, emphasizing that the State Bank of Vietnam (SBV) is currently seeking to restructure the local banking system and discourages new banks to be established. The country has already had Housing Development Commercial Joint-Stock Bank (HDBank), Hung said, once again doubting the need of another real estate bank.

 

Source Sophie/ StoxPlus