Mortgages replace cash as Vietnam housing rebounds

Ho Chi Minh City

LE Trang, an office worker, and her husband Hung didn't think they could afford a three-bedroom apartment in a high-rise in the suburbs of Ho Chi Minh City. The availability of a mortgage to finance the purchase of a one billion dong (S$62,500) condominium changed their course.

The newly-weds secured a 15-year mortgage for the 78 square metre unit, joining tens of thousands of first-time buyers in Vietnam that are fuelling an explosion in the US$40 billion home-loan industry.

Loans to homebuyers surged 22 per cent this year through August, marking a shift in a country where it isn't uncommon for buyers to plunk down sacks of money in all-cash transactions. Real estate loans, which account for about 8 per cent of total bank lending, are contributing to a property rebound that's seen home sales almost double this …