Capital flow into real estate is being unblocked

According to the State Bank, in the first 6 months of 2023, real estate credit grew by 4.68%, equivalent to the general credit growth rate (4.73%). In particular, real estate business credit grew at a much higher rate (17.4%). This shows that solutions to overcome difficulties have begun to take effect.

In its latest report, VNDIRECT also stated that loan capital has been and will be more accessible to real estate investors. Specifically, survey results show that home loan interest rates at banks in September ranged from 4.99 - 11.8%/year.

Typically, at commercial banks such as TPBank, HDB, VIB, Eximbank... home loan interest rates fluctuate mainly between 6.8 - 9%/year. A few banks have loan interest rates above 9%/year, such as SeABank (9.29%/year), UOB (9.49%/year)...

Commenting on capital flow into the real estate market, Dr. Can Van Luc, chief economist of BIDV, member of the National Financial and Monetary Policy Advisory Council, said that money supply has started to increase again since March 2023 and has increased by over 6% compared to the same period last year. When money circulation is faster, it will promote capital for businesses and people better.

Currently, capital flows into real estate are still flowing steadily. Notably, newly registered FDI capital into the real estate industry as of September 20 reached nearly 2 billion USD, accounting for nearly 10% of FDI.

Capital flow into the real estate market is gradually being cleared. (Illustration photo)

Regarding bonds, real estate businesses have started issuing bonds again. In the first 8 months of this year, the entire market issued about 132 trillion VND, a decrease of about 44% compared to the same period last year, lower than the decrease of the whole of last year (47%).

According to Mr. Luc, the capital flow has been cleared because recently, a series of policies have had a strong impact on the real estate market.

Typically, monetary policy is shifting from “tight, firm” to “flexible, loose”. The State Bank 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.

“ These are unprecedented policies for finance and the real estate market. In particular, fiscal policy continues to expand to support people and businesses, continue to defer taxes, and reduce fees ,” Mr. Can Van Luc affirmed.

Capital flows are forecast to continue to improve by the end of the year. (Illustration photo)

Mr. Luc also optimistically predicted that the accelerated policies to remove obstacles will help capital flow to the real estate market "breathe easier" in the coming time.

Sharing the same view, experts all agree that in the coming time, capital flows into real estate will have many more positive changes.

One of the notable contents is that the State Bank of Vietnam has issued Circular No. 10 amending Circular 06 to remove difficulties in loan conditions for real estate businesses.

VNDirect Securities Company believes that the issuance of Circular No. 10 will help restore liquidity in the real estate project merger and acquisition market when businesses can use borrowed capital to buy back projects. At the same time, it will help credit capital reach real estate projects in the project implementation and initial construction stages, when projects need the most support.

In addition, real estate businesses facing financial difficulties now have the basis to compensate, maintain financial commitments to customers as well as continue to implement projects.

“ We expect Circular 10 to help unblock credit flows into the real estate industry in the last months of this year ,” VNDirect said.

Besides domestic capital flows, the real estate market is also attracting a large amount of FDI capital.

According to data from the Foreign Investment Agency (Ministry of Planning and Investment), in the first 9 months of 2023, the real estate business attracted nearly 1.94 billion USD, accounting for more than 9.6% of the total registered FDI capital in Vietnam.

Mr. Neil Macgregor, Managing Director of Savills Vietnam, said that Savills is currently continuously receiving requests from international businesses wishing to invest directly in the Vietnamese domestic market across all segments from housing, commerce to industry.

“ With the Government’s efforts to resolve the real estate market’s difficulties, we believe that the market will be adjusted with more positive information in the coming time, in a more sustainable direction with clearer regulations ,” emphasized a representative of Savills.

Ngoc Vy

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