On the afternoon of October 10, the Vietnam Real Estate Association (VNREA) hosted the workshop “Solutions to remove difficulties to promote the development of the real estate market” to provide experts with a space to discuss and propose practical solutions to accelerate the recovery and sustainable development of the real estate market, thereby supporting economic growth in general.
Real estate market is difficult, the Government is worried
In his opening speech, Dr. Nguyen Van Khoi - Chairman of VNREA said that in the past two years, the real estate market has encountered major bottlenecks, causing businesses and investors to decline sharply.
In particular, from the second half of 2022, real estate businesses will fall into a "dilemma" when projects are stalled, cash flow is blocked and debt repayment pressure is heavy.
In particular, the stagnation of the real estate market in recent times has been most affected by legal issues - accounting for 70% of difficulties and obstacles of projects. Citing information from the Ministry of Construction, Mr. Khoi said that in Hanoi and Ho Chi Minh City alone, an estimated 400 projects have encountered obstacles in implementation procedures, and these bottlenecks have lasted for many years but have not been resolved.
“In practice, some localities lack initiative and determination in directing and resolving difficulties and problems within their authority, and have an avoidance mentality, as well as in coordinating with central agencies to resolve difficulties for businesses. In addition, many legal regulations are overlapping, and the application of the law is inconsistent and not synchronous,” said the Chairman of VNREA.
VNREA Chairman Nguyen Van Khoi spoke at the workshop.
However, besides the remaining problems, Dr. Nguyen Van Khoi still clearly recognized that the Government and ministries and branches have been very active in issuing many mechanisms and policies to directly and indirectly support the real estate sector over the past time.
“We believe that these policies can remove many bottlenecks in the real estate market, but more comprehensive solutions are needed, including legal procedures, access to capital to create liquidity and product supply, which need to be discussed and interpreted by experts and market members,” Mr. Khoi shared.
Acknowledging the State's efforts in recent times, Dr. Can Van Luc - Member of the National Monetary and Financial Policy Advisory Council said that the policies of competent agencies are affecting the market in a positive and tight direction.
In particular, monetary policy has shifted from tight and certain to loose and flexible, providing good support for businesses in extending/postponing debt. Fiscal policy has been expanded, focused, and closely following the fluctuations of the real estate market.
Finally, laws directly related to real estate such as the Land Law, Housing Law, Real Estate Business Law, etc. are being actively completed by competent authorities to submit to the National Assembly.
“There has never been a case where these three laws were amended at the same time, nor has there ever been a case where other related laws were amended at the same time as these three laws. Therefore, we must truly acknowledge the Government’s efforts and attempts in rescuing the real estate market over the past time as well as in the coming time,” Mr. Luc emphasized.
Need to fix "correctly and accurately" many outstanding problems
Talking about solutions to remove difficulties and legal and financial problems for the current real estate market, Mr. Luc analyzed that there are 6 main factors affecting real estate: macroeconomics (inflation, interest rates, exchange rates, money supply, investment, etc.); legal environment, real estate management and supervision methods; planning and infrastructure; finance (capital sources, taxes and fees, primary and secondary real estate transaction markets); supply and demand and prices; transparent data information.
According to the expert, legal issues are the biggest obstacle and difficulty for real estate. This opinion comes from a number of reasons such as the legal regulations of the land, construction and real estate sectors are extremely complicated, involving more than 100 Laws, Decrees, Circulars... in which many regulations are overlapping, inconsistent and lacking in uniformity.
Next, the legal regulations are not complete, not guided promptly, not close to reality. Finally, the fear of making mistakes, fear of responsibility, and shirking responsibility… has slowed down and even blocked many projects.
Dr. Can Van Luc believes that real estate businesses should operate according to the principle of "if you have a disease, you must treat it".
Proposing some solutions, Dr. Can Van Luc said that it is necessary to continue to perfect specific institutions and speed up the progress of amending related laws. However, even if it is done quickly, it is still necessary to review to ensure synchronization and consistency between the laws, solving the legal problem for real estate.
To bring capital back into real estate, the expert shared that it should be resolved soon, ensuring the legitimate rights of investors, thereby strengthening investors' confidence in the real estate market.
On the business side, Mr. Luc expressed his opinion that in the current difficult and unpredictable context, real estate businesses must operate according to the principle of "if there is a disease, it must be treated".
Specifically, businesses need to be decisive in restructuring their investments as well as their corporate governance. In the context of a difficult market, real estate businesses need to limit their spread-out investments and restructure their businesses to overcome adversity.
In addition, gradually diversify capital sources (in addition to bank credit, refer to other channels such as bonds, stocks, investment funds, financial leasing, etc.) and mobilize capital associated with specific capital usage purposes, reduce financial leverage, and pay attention to risk management.
Along with that, businesses need to aim for more transparency and professionalism in tax and credit records, and fulfill their commitments to investors to strengthen trust.
In particular, Mr. Luc noted that many businesses have recently expressed their opinions and views to the State, thereby proposing many solutions to remove difficulties for the real estate market - this is an extremely positive action.
However, the expert commented that many businesses are still "deeply immersed" in telling stories about their business situation without getting to the heart of the problem, so Mr. Luc said that businesses need to be more clever, "making accurate and correct recommendations" to the authorities .
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