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Last week the State Bank of Vietnam continued reducing diverse regulatory interest rates in a bid to help remove impediments for borrowers, as well as support credit institution efforts to drive down input costs, and from there be able to reduce lending rates.

Given the challenging economic environment, the performance of numerous banks is rather bleak, particularly due to the mounting bad debt levels.

The State Bank of Vietnam (SBV) is set to further reduce regulatory interest rates on May 25, the third cut in a row since mid-March, expected to give a boost to the stagnant real estate market.

Decisive action taken by Vietnam’s central bank on restructuring failing banks signifies a considerable stride towards revamping and fostering a sound financial landscape.

The tight monetary policy and the corporate bond and housing market crash in the second half of 2022 resulted in a cash crunch in the real estate market. However, capital has begun flowing back to the housing market.

At shareholders’ meetings held recently, real estate developers affirmed their priority to develop social housing and affordable residential housing, with a plan to build thousands of apartments in 2023.

Despite efforts from the government and businesses, a lack of legal clarity and limited capital flows are creating bottlenecks and uncertainty for thousands of real estate projects.

Vietnamese small business owners overwhelmingly expect to grow in 2023, with a new survey showing they are the most confident in their local economy across the surveyed markets in the Asia-Pacific.

Solutions to create more conditions for capital inflows were outlined in an insightful roundtable discussion on the real estate market held by VIR on April 19.