LENDING and borrowing remains an issue in Vietnam’s real estate market, even as Ho Chi Minh City continues to lag Hanoi in property developments, a report has noted.

Restrictions on expansion in Ho Chi Minh City has worsened the prospects for mass-market launches outside the central area, said Maybank Kim Eng analyst Thai Quang Trung, who previously worked in research and consulting at the former Jones Lang LaSalle.

Mr Trung called Ho Chi Minh City infrastructure “a bottleneck”.

But he added in his update on first-quarter launches that “supply in Hanoi continues picking up at a faster pace, as major developers in Hanoi seem to be getting approvals in a timelier manner”, with the growth largely driven by Vinhomes projects.

Meanwhile, the property markets in both cities face slowing credit growth, said Mr Trung, as banks become more selective on which developers they dish out loans to.

He added that, while mortgage home buyers are still a growth segment for banks, challenges for lenders include developing credit rating systems for mass-market buyers with monthly pay cheques in the neighbourhood of US$500.