Real estate businesses must be determined to pay off debts to investors.

Economic push

At the first Autumn Real Estate Forum held on the morning of September 28, Dr. Can Van Luc, an economic expert, assessed: Exactly the past year, the real estate market has been very difficult, but this is a common difficulty of the economy.

However, currently, Vietnam's economy is growing strongly, which will support the real estate market to break out.

Dr. Can Van Luc, economic expert. (Photo: RT)

Analyzing this further, Dr. Can Van Luc said: Regarding the macro economy, the world economy and Vietnam are showing signs of recovery, and 2024 - 2025 will be better.

International organizations all agree that this year's economy is difficult, but next year will be brighter. In 2023, Vietnam's economy is forecast to grow from 5-5.5% and in 2024, it is forecasted to grow about 6.5%.

“This is the most normal level, when we quantify new growth drivers in a meeting with the National Assembly, if everything goes well we can grow by an additional 0.4 to 0.7 percentage points per year,” Mr. Luc said.

According to Dr. Can Van Luc, the economy in the third quarter of this year could grow by nearly 6%, and in the fourth quarter by about 7.5%. This shows that Vietnam is recovering better each quarter than the previous one, similarly, China and other Asian countries are also on a good growth trajectory.

Vietnam's exports and industrial production have begun to improve. Although cumulative exports are still decreasing, they are gradually decreasing. Industrial production is recovering: In January, the index was negative 10%, and now it is only negative 0.47%.

Regarding public investment disbursement, although there are still many challenges, it has increased sharply this year, with an average disbursement of 95%, an increase of 25-30% over the same period, currently contributing 1.5 - 2% of additional growth.

FDI attraction is recovering, it was still negative by the end of July, but most recently, by the end of 9 months of 2023, registered capital was 20.2 billion USD, up 7%, while FDI disbursement increased 2.2%. While the world's FDI attraction is forecast at about 10%, Mr. Luc said that this growth is very valuable.

Currently, global inflation has been decreasing, averaging 8.4% and is forecast to be 5 - 5.5% by the end of this year and 3 - 3.5% by the end of 2024.

In Vietnam, the inflation rate has been decreasing gradually, although October may increase slightly due to some seasonal factors such as energy and food prices, but the main trend is decreasing, creating favorable conditions for the bank to operate a loose monetary policy.

Basically, interest rate management is flat, forecast to start decreasing from the third quarter of 2024 in Asian and European countries. Vietnam's operating interest rate has basically decreased by 2% in the past 4 months, interbank interest rates have decreased relatively low, proving that bank liquidity is relatively abundant, attracting money to regulate the market.

Money supply has started to increase again since March 2023, and compared to the same period last year, it has increased by over 6%. When money circulation is faster, it will promote capital for businesses and people better.

Regarding the exchange rate, compared to the USD, the VND is depreciating by about 3%. Mr. Luc said that this is not a cause for concern, because when the US Federal Reserve (FED) stops raising interest rates, it will be difficult for the USD to increase in value. Therefore, it is forecasted that by the end of 2023, the exchange rate will only increase by about 3 - 3.5%.

“In my opinion, inflation this year is not a cause for concern. Inflation next year will be the same, only below about 4%,” Mr. Luc shared.

Factors affecting the real estate market

Regarding policy mechanisms, Dr. Can Van Luc said that some key policies have a strong impact on the real estate market. For example, monetary policy is shifting from “tight and firm” to “flexible and loose”.

Some key policies have a strong impact on the real estate market. (Photo: DP)

In particular, the State Bank of Vietnam (SBV) has also reduced the operating interest rate 4 times, and the interest rate level is gradually decreasing. In addition, many policies to support businesses and people have been implemented such as debt restructuring, debt rollover, etc.

Mr. Luc assessed that there were unprecedented policies for finance and the real estate market. At one point, within just 1 month, 4 policies were passed such as Decree 08, Resolution 33, Decree 10 and the project of 1 million social housing units...

And never before have we had the opportunity to amend so many laws at the same time as we do now with the Land Law, Housing Law, Real Estate Business Law, Credit Institutions Law, Auction Law, and Bidding Law.

In particular, fiscal policy continues to expand to support people and businesses, continue to defer taxes, and reduce fees.

“We estimate that the total value of all fiscal packages is about VND200 trillion in nominal terms, with a real value of about VND70-80 trillion. Obviously, we currently have many very strong support policies for the market,” said Mr. Luc.

Regarding bonds, real estate enterprises have started issuing bonds again. The issuance value has decreased less compared to the same period last year. In the first 8 months of this year, the whole market issued about 132 trillion, a decrease of about 44% compared to the same period last year, lower than the decrease of the whole last year (47%).

Regarding the issuance structure, real estate enterprises account for 35%, credit institutions account for 41%, showing that real estate enterprises have been and are issuing again.

“More importantly, currently, real estate has issued about 47 trillion, almost equal to the issuance level of the whole of last year, showing that the market is gradually recovering,” Mr. Luc added.

Regarding the maturity story, basically the end of this year is not a concern, the main maturity point will be in March 2024.

Overview of the Forum. (Photo: RT)

Mr. Luc said that this issue is not too worrying, still under control, currently businesses are still actively buying back and deferring bond debt.

However, in 2023 - 2024, the real estate market will face major risks and challenges such as weak demand and slowing growth. In addition, businesses will face many difficulties, especially restructuring.

In addition, the real estate bond market is recovering but it takes time and cannot recover quickly, especially the slow recovery of investor confidence, which is an important factor.

Therefore, Mr. Luc recommended that Vietnam should focus on regulating supply and demand, real estate market prices, promptly resolve outstanding legal violations and problems to regain investors' confidence; and effectively implement policies and resolutions issued in recent times.

For real estate businesses, the current market is very difficult, so businesses should speak up accurately and correctly to find a solution together.

“Specifically, we need to be determined to pay off debts; restructure and diversify products and capital sources; be transparent in management; and better manage risks. In particular, green real estate needs attention because this is an inevitable trend,” Mr. Luc emphasized.

Source: https://www.congluan.vn/doanh-nghiep-bat-dong-san-phai-quyet-tam-thanh-toan-no-nan-cho-nha-dau-tu-post266481.html