On the morning of February 17, Prime Minister Pham Minh Chinh chaired a national online conference on removing difficulties and promoting the safe, healthy and sustainable development of the real estate market. The conference took place in the context of the real estate market falling into crisis for nearly a year now with the number of bankrupt enterprises increasing by 40%.
The "big guys" of the Mekong Delta have made a series of recommendations.
Deputy Minister of Construction Nguyen Van Sinh said that in 2022, the supply of real estate and housing will be scarce; the structure of housing products will be inclined towards the mid- to high-end housing segment, and there will be a shortage of housing for low-income people.
According to the report of the State Bank of Vietnam (SBV), outstanding credit for real estate business activities in the fourth quarter of 2022 was nearly VND 800,000 billion; outstanding individual corporate bonds were about VND 2 million billion, of which real estate enterprises were over VND 400,000 billion (accounting for more than 30%). In 2022, the operations of real estate businesses faced many difficulties due to difficulty in accessing capital sources (credit, bonds, etc.); increasing interest rates, foreign exchange rates, input material prices; inability to sell products, etc., leading to many corporations and businesses having to reduce investment scale; streamline labor (some corporations reduced their workforce by up to 50%); stop or postpone investment and construction activities of some projects; stop implementing new projects, etc. Difficulties in the real estate market led to difficulties for contractors, material suppliers and many other industries, affecting social security.
The need for support in terms of mechanism is the recommendation of Mr. Bui Thanh Nhon, Chairman of the Board of Directors of Nova Real Estate Group Joint Stock Company (Novaland). Mr. Nhon proposed that the Government and the State Bank consider issuing regulations allowing banks to extend, postpone and maintain the debt group for real estate projects for 2-3 years to help businesses have time to wait for the market to recover and complete the project's legal procedures. "Timely support is very important to prevent 10% - 20% of the economy's outstanding debt from being converted to bad debt," Mr. Nhon said.
Novaland leaders have asked the Government to provide support in terms of mechanisms to resolve difficulties in the real estate market. In the photo: NovaWorld Phan Thiet project. Photo: SON NHUNG
Interest rates are also a major concern for businesses today. Mr. Nhon said that interest rates have increased quite rapidly since the end of 2022, with some loans having interest rates increasing by nearly 30%. Novaland's Chairman suggested that the Government, the State Bank, and commercial banks take measures to reduce the deposit interest rate level, thereby quickly reducing lending interest rates. Novaland's Chairman also recommended that the Government soon issue a decree amending Decree 65 on the issuance of individual corporate bonds.
Legal issues were also raised by Mr. Pham Thieu Hoa, Chairman of the Board of Directors of Vinhomes Joint Stock Company, at the conference and emphasized that this is a prominent problem. In addition to credit difficulties and scarce housing supply, according to Mr. Hoa, supply and demand are out of phase, and corporate bonds cannot be issued. Facing legal and capital difficulties, businesses have not been able to meet actual supply needs. "If the difficulties continue without timely solutions, many real estate businesses will have to close down and go bankrupt, and the already lacking supply in the market will become even more lacking," Mr. Hoa worried.
The Government and the National Assembly need to get involved.
Also concerned about the mechanism and legal issues, the general director of a real estate company in Ho Chi Minh City, after following the conference, said that the company's project had all the necessary procedures and legal documents, and was almost completed, but because of an unworthy mechanism, the local authorities did not handle it, causing the project to be stuck for a long time, causing difficulties for the company and causing great losses.
"The conference basically solved many common difficulties for the real estate market with instructions related to financial and credit policies... but mainly for housing projects for low-income people, social housing... That is also a good signal, from which the market will be stable and sustainable" - this person commented.
Meanwhile, the leader of a real estate company with 99.78% state capital said that the company's project was "frozen" for 4 years just because the name of the joint stock company had not been updated after equitization according to the general policy of the Government. Following the conference from the beginning, this leader said that the conference was considered the last hope for practical solutions to the difficulties of enterprises.
At this time, the quickest way to save the situation is to consider resolving each specific project. For projects that have been implemented in the middle, it is necessary to consider support and resolve difficulties to complete the product. "Investors can sell products, home buyers have houses, cash flow returns, businesses can pay off bank loans, reduce bad debt... At that time, the market will definitely be clear" - this person expressed his opinion.
Vice Chairman of the Ho Chi Minh City People's Committee Bui Xuan Cuong said that in the coming time, the city will focus on removing difficulties and obstacles in investment procedures for social housing projects, worker accommodation, and renovation of old apartment buildings. The implementation process will focus on removing obstacles for real estate projects that are behind schedule in terms of legality, have not paid land use fees, have not completed procedures for granting certificates of land use rights, house ownership rights, and assets associated with the interests of the people.
Professor Dr. Hoang Van Cuong - National Assembly delegate, Vice Principal of the National Economics University - said that to resolve the current difficulties of the real estate market, the Government's involvement in credit, handling corporate bonds and resolving legal problems is needed.
According to Mr. Cuong, legal problems are mainly due to overlapping, contradictory or unclear legal regulations, so management agencies are afraid of violations and do not dare to make decisions. If we review and revise all decrees or wait for the completion of relevant laws, it will take a long time. Therefore, there needs to be timely and synchronous action from both the Government and the National Assembly.
On the Government side, it is necessary to establish a committee to resolve legal problems from the central to local levels. On the National Assembly side, it is necessary to pass a resolution to immediately resolve problems and conflicts in legal regulations.
Business has its profits and losses!
Concluding the conference, the Prime Minister commented that the policy response of relevant entities (management agencies, enterprises, banks) is still slow; officials in some places and at some times are still afraid of responsibility, do not dare to do things, and enterprises are not really flexible and have not promptly handled problems caused by themselves.
The Head of Government emphasized that the more difficulties and challenges there are, the more relevant entities must unite, promote a sense of responsibility, and jointly handle issues in the spirit of "harmonious benefits and shared risks" between the state, people and enterprises. The Prime Minister noted that the removal of difficulties must comply with market rules, supply and demand rules, and competition rules; and that real estate must be determined to be equal to other industries and fields. In particular, the balance and harmony of supply and demand reflected in real estate prices must be the driving force to promote development, not to eliminate development.
Regarding tasks and solutions, the Prime Minister assigned state management agencies to strengthen the review, supplement, and completion of institutions; develop plans; monitor, inspect, and resolve outstanding issues. Banking and financial institutions must clear capital flows and resolve credit issues. Real estate enterprises must be responsible for themselves, resolve difficulties caused by themselves, restructure segments, and reasonable prices to promote liquidity, aiming for profitable but harmonious business.
"When doing business with profit, we have to compensate for when doing business with loss. We cannot always make profit, we cannot demand profit even when facing difficulties, no one will hold our hands until night, no one will sleep with us until morning, we have to contribute for the common good" - the Prime Minister emphasized.
Government leaders require banks to reduce input costs and interest rates with the participation of the State Bank, thereby reducing lending rates, restructuring debt groups, reducing fees, charges, etc. Because only when the economy develops can banks develop.
Authorities at all levels must remove difficulties and obstacles in procedures, speed up construction, adjust plans to suit local conditions and situations, and strictly implement the plans. In particular, it is important to ensure the legitimate rights and interests of the people.
The government will have a separate project on housing development, worker housing, and housing for low-income people. The government will consider a VND110,000 billion credit package for this sector.
Before concluding the conference, Prime Minister Pham Minh Chinh re-emphasized the spirit of the conference was to remove difficulties and promote the real estate market to develop safely, healthily, and sustainably, and "no one bails out anyone".
No separate credit room for real estate
Governor of the State Bank of Vietnam Nguyen Thi Hong said she has directed credit institutions to continue to allocate capital to real estate projects that meet legal conditions, have the ability to sell products, meet real housing needs, and save operating costs to lend at lower interest rates.
"To develop a safe, healthy and sustainable real estate market, we must aim to serve the majority of people, especially those with real housing needs, and limit speculation, price inflation and profiteering. Regarding credit orientation, in 2023, we will grow by 14% - 15%, higher than last year's 14.17%. The State Bank does not have a separate room to control real estate credit," said Ms. Hong.
Regarding debt repayment restructuring, Ms. Hong said that the Ministry of Construction needs to review all projects, see which projects are speculative, which projects are associated with production and business, which are associated with trade and services, and from there have their own responses and solutions.
Opening up many expectations for the real estate market
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), commented that the conference dissected many practical issues, had dialogue, listened, and exchanged sincerely and frankly between the Government, ministries, branches, and businesses... From there, legal problems are expected to be resolved soon. Regarding credit, the State Bank is also interested in restructuring and extending debt..., Mr. Chau said that this is a very positive thing.
"We really welcome the Prime Minister and ministries' determination to remove difficulties for the real estate market in general, with special attention to the social housing market and housing for low-income people," said Mr. Chau.
Social stability is always a top priority. Therefore, according to Mr. Chau, businesses themselves, localities, ministries and even customers must take responsibility for their own actions so that all interests are in harmony, so that the real estate market can develop healthily.
Source: https://nld.com.vn/thoi-su/chinh-phu-se-co-nghi-quyet-ve-bat-dong-san-20230217223039694.htm
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