The State Bank of Vietnam (SBV) has submitted to the government a plan to set aside VND50 trillion (US$2.3 billion) to support the commercial condo segment by enabling local banks to offer local homebuyers long-term lending at preferential rates, Deputy Minister of Construction Nguyen Tran Nam has told Tuoi Tre (Youth) newspaper.

The credit package will be applicable to mid-range and luxury condominium projects, Nam said.

"The government is consulting other relevant state agencies for the final decision on whether the credit package will be approved or not,” he said.

As proposed by the SBV, the lending package will offer loans at seven percent per year over the first 10 years. The lending can be extended in the next 5-10 years with market value-adjusted interest or normal commercial rates.

Nam told a conference in Hanoi late last week that the local property market has started to recover with rising successful transactions and declining property inventory.

In 2014, the real estate inventory declined dramatically by more than VND50 trillion, or 43 percent, compared to 2013, according to the latest report of the Ministry of Construction.

Meanwhile, regarding the VND30 trillion credit package for social housing, as of January 15, signed contracts topped VND10 trillion in value, about VND6 trillion of which was finance for homebuyers, about 12,000 households nationwide, according to the Ministry of Construction.

There were 10 banks involved in the lending process funded by the package, bringing the total number of participating lenders to 15, the ministry said.

Resolution 67 of the Government, issued in 2014, added more types of homebuyers who can access the loans from the package to purchase affordable houses, and helped extend the lending time from 10 years up to 15 years.

Last year, there were about 11,450 successful transactions in Hanoi – more than double that of 2013.

Local banks had clinched deals to lend VND1.471 trillion to 1,513 clients in Ho Chi Minh City by the end of October 2014, of which VND658 billion was disbursed to two businesses and VND393.83 billion to 1,444 individuals, according to a report by the city branch of the SBV.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!