Access to credit for real estate transactions in emerging markets - Empirical evidence from Vietnam

Khuc The Anh1,, Nguyen Manh Cuong1, Nguyen Ha Anh1, Vu Hoang Anh1, Nguyen Quoc Tien1
1 National Economics University, Hanoi, Vietnam

Main Article Content


The growing disparity between the wealthy and the poor has become more evident than ever, as reflected in residents’ housing conditions. Meanwhile, real estate credit is mainly directed towards the high-end segment, but mortgage cash flow for social and commercial housing in the low-mid range segment is still insufficient. Consequently, there is an asymmetry between the requirements for meeting housing needs and household income. This study investigates the impact of attitudes, credit accessibility, and policies on individuals’ borrowing intentions in real estate transactions. Structural equation modeling was employed to analyze the data obtained from 889 Vietnamese respondents. The results show that policies and attitudes directly impact people’s intentions to access credit. Meanwhile, credit accessibility indirectly affects this intention. These findings can serve as the basis for financial institutions to devise secure, accessible, and efficient loan policies for individuals with legitimate needs. Specifically, lending institutions should improve the quality of their services and increase their assistance to borrowers. The government should enact a stronger legal framework to address public housing demand and efficiently regulate the real estate market.

Article Details


Ajzen, I. (1991), “The theory of planned behavior”, Organizational Behavior and Human Decision Processes, Vol. 50 No. 2, pp. 179 - 211.
Almossawi, M. (2001), “Bank selection criteria employed by college students in Bahrain: an empirical analysis”, International Journal of Bank Marketing, Vol. 19 No. 3, pp. 115 - 125.
Andersson, E., Naumanen, P., Ruonavaara, H. and Turner, B. (2007), “Housing, socio-economic security and risks. A qualitative comparison of household attitudes in Finland and Sweden”, European Journal of Housing Policy, Vol. 7 No. 2, pp. 151 - 172.
Baqutaya, S., Ariffin, A.S. and Raji, F. (2016), “Affordable housing policy: issues and challenges among middle-income groups”, International Journal of Social Science and Humanity, Vol. 6 No. 6, pp. 433 - 436.
Black, L.K., Krainer, J.R. and Nichols, J.B. (2020), “Safe collateral, arm’s-length credit: evidence from the commercial real estate market”, The Review of Financial Studies, Vol. 33 No. 11, pp. 5173 - 5211.
Breeden, J.L. (2016), “Incorporating lifecycle and environment in loan-level forecasts and stress tests”, European Journal of Operational Research, Vol. 255 No. 2, pp. 649 - 658.
Dale, P. and McLaughlin, J. (2000), Land administration, Oxford University Press, Oxford.
Del Giudice, V., De Paola, P. and Del Giudice, F.P. (2020), “Covid-19 infects real estate markets: short and mid-run effects on housing prices in Campania region (Italy)”, Social Sciences, Vol. 9 No. 7, pp. 1 - 18.
Devlin, J.F. (2002), “An analysis of choice criteria in the home loans market”, International Journal of Bank Marketing, Vol. 20 No. 5, pp. 212 - 226.
Eberly, J. and Krishnamurthy, A. (2014), “Efficient credit policies in a housing debt crisis”, Brookings Papers on Economic Activity, Vol. 2014 No. 2, pp. 73 - 136.
Enekwe, C.I., Ikechukwu, A.C. and Nnagbogu, E.K. (2014), “The effect of financial leverage on financial performance: evidence of quoted pharmaceutical companies in Nigeria”, IOSR Journal of Economics and Finance, Vol. 5 No. 3, pp. 17 - 25.
Gibler, K. and Nelson, S. (2003), “Consumer behavior applications to real estate education”, Journal of Real Estate Practice and Education, Vol. 6 No. 1, pp. 63 - 83.
Gupta, U. and Sinha, R. (2015), “A comparative study on factors affecting consumer’s buying behavior towards home loans (with special reference to State Bank of India and life insurance corporation, Allahabad)”, IOSR Journal of Business and Management, Vol. 2 No. 17, pp. 13 - 17.
Hair, J.F., Sarstedt, M., Hopkins, L. and Kuppelwieser, V.G. (2014), “Partial least squares structural equation modeling (PLS-SEM)”, European Business Review, Vol. 26 No. 2, pp. 106 - 121.
Hair, J.F., Sarstedt, M., Ringle, C.M. and Gudergan, S. (2017), Advanced issues in partial least squares structural equation modeling, SAGE Publications Inc., Los Angeles.
Hayhoe, C.R., Leach, L. and Turner, P.R. (1999), “Discriminating the number of credit cards held by college students using credit and money attitudes”, Journal of Economic Psychology, Vol. 20 No. 6, pp. 643 - 656.
Homburg, C. and Baumgartner, H. (1995), “Beurteilung von kausalmodellen. Bestandsaufnahme und anwendungsempfehlungen”, Marketing ZFP, Vol. 17 No. 3, pp. 162 - 176.
Islam, A., Nguyen, C. and Smyth, R. (2015), “Does microfinance change informal lending in village economies? Evidence from Bangladesh”, Journal of Banking & Finance, Vol. 50, pp. 141 - 156.
Kisaka, S.E. (2014), “The impact of attitudes towards saving, borrowing and investment on the capital accumulation process in Kenya: an application of the theory of planned behavior”, Research Journal of Finance and Accounting, Vol. 9 No. 5, pp. 140 - 152.
Liu, C. and Xiong, W. (2018), China’s real estate market, National Bureau of Economic Research, Cambridge, Massachusetts.
Marx, B.M. and Turner, L.J. (2019), “The benefits of borrowing: evidence on student loan debt and community college attainment”, Education Next, Vol. 1 No. 9, pp. 70 - 77.
Mirza, N., Rahat, B. and Reddy, K. (2016), “Financial leverage and stock returns: evidence from an emerging economy”, Economic Research-Ekonomska Istraživanja, Vol. 29 No. 1, pp. 85 - 100.
Peshkov, A.V. (2019), “Remote mortgage lending as a resource for housing development”, IOP Conference Series: Materials Science and Engineering, Vol. 667 No. 1, 012073.
Rehman, H.U. and Ahmed, S. (2008), “An empirical analysis of the determinants of bank selection in Pakistan: a customer view”, Pakistan Economic and Social Review, Vol. 46 No. 2, pp. 147 - 160.
Riyadi, S. (2016), “The influence of capital structure, growth, company size to profitability and company value of manufacture firms listed in Indonesia Stock Exchange”, International Journal of Business and Finance Management Research, Vol. 4 No. 6, pp. 80 - 101.
Sangkakoon, P., Ngarmyarn, A. and Panichpathom, S. (2014), “The influence of group references in home purchase intention in Thailand”, in 21st Annual European Real Estate Society Conference (ERES: Conference), The European Real Estate Society, Bucharest.
Sayani, H. and Miniaoui, H. (2013), “Determinants of bank selection in the United Arab Emirates”, International Journal of Bank Marketing, Vol. 31 No. 3, pp. 206 - 228.
Shilling, J. and Wurtzebach, C. (2012), “Is value-added and opportunistic real estate investing beneficial? If so, why?”, Journal of Real Estate Research, Vol. 34 No. 4, pp. 429 - 462.
Summers, T.A., Belleau, B.D. and Xu, Y. (2006), “Predicting purchase intention of a controversial luxury apparel product”, Journal of Fashion Marketing and Management: An International Journal, Vol. 10 No. 4, pp. 405 - 419.
Wu, J., Si, S. and Wu, X. (2016), “Entrepreneurial finance and innovation: informal debt as an empirical case”, Strategic Entrepreneurship Journal, Vol. 10 No. 3, pp. 257 - 273.
Yunus, N., Hansz, J.A. and Kennedy, P.J. (2012), “Dynamic interactions between private and public real estate markets: some international evidence”, The Journal of Real Estate Finance and Economics, Vol. 45 No. 4, pp. 1021 - 1040.