Since the beginning of this year banks have lent $1 billion to several property projects including 10 major developments in the country's two biggest real estate markets, Hanoi and Ho Chi Minh City.
In January, the Bank for Investment and Development of Vietnam agreed to lend Hoang Anh Gia Lai $323 million for property development. In February, the Bank for Foreign Trade of Vietnam approved a loan of $44 million to Indochina Land to develop the $145 million Indochina Plaza Hanoi, a housing, office, and commercial complex.
And Fei Yueh Vietnam has just begun construction of a five star hotel Nikko Saigon in District HCM City, at a projected cost of S$100 million.
The banks said that this is because the have confidence in the long term future of property investment in the country. 'There are some sound projects out there,' said Nguyen Hoa Binh, chairman of Vietcombank.
The Bank of Technology and Commerce is targeting really sound property development projects for lending, according to Nguyen Duc Vinh, its general director.
Lending to individual property investors is also strong and official figures say that it is expected to amount to 86 trillion VND this year.
Vietcombank said it has earmarked 1.5 to 2 trillion VND for loans to people who want to buy or repair houses in the next few months.
Dang Hong Anh, chairman of Sacomreal the property trading arm of the listed Sacombank said the real estate market is ripe for recovery after a year of being in the doldrums.
Housing and land prices as well as bank interest rates have plunged and the Government is implementing several stimulus programmes, he said. If property developers are ready to relinquish some of their profits and sell at reasonable prices, people would be ready to buy, he added.
Analysts said many property developers are opting for apartment blocks with small units to meet an increasing demand from young couples with moderate incomes.
