Besides the irrationality of investors, banks take a big
account in creating real estate bubble in the recent years. In 2008, loans on
real estate was 138,000 billion VND (≈£3,942,000), in 2010 it nearly
doubled, 235,000 billion VND (≈£6,714,000).
Why banks easily lend for real estate projects?
Expected profit when lending for real estate is higher than
lending to manufacturing firms (from 4-7% according to Saigon Marketing
Secondly, banks themselves
hold a large amount of property as a channel of investment. I suppose that they
may aware of real estate bubble‘s appearance, though they pump more and more in
order to blow the bubble bigger and then earn profit easily.
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