Difficult to access credit capital due to many risks
In recent times, the market has recorded many positive signs of transactions reappearing. Some real estate businesses with strong finances, able to endure the recent freezing period, have also begun to complete projects to bring products to the market.
However, the recovery is not really strong because many other businesses are still "sinking" gradually when having to hold on to projects without being able to arrange capital to continue implementing them to clear the cash flow. These are businesses that are entangled in legal issues, have difficulty meeting the conditions of the bank or cannot continue to borrow capital because the interest rate is not really attractive, while still being burdened with previous interest rates.
There are even businesses that are not qualified to pass the application review round. Because the health of these businesses is in the risk zone, there is a high risk when lending.
Many businesses have difficulty accessing loans due to the many risks involved.
Meanwhile, other capital flows that are often used by real estate businesses, such as customer deposits and bonds, are also facing many problems. With investor confidence having fallen sharply in recent times, future housing projects seem to have little appeal to buyers. Many people even try to wait to buy houses with certificates, although they have to pay more but reduce some of the risks they will encounter.
As for the corporate bond market, confidence in this market is also not much after the recent difficult period of the market. The value of individual bond issuance has continuously decreased since June 2022 and only recorded improvement since March this year thanks to Decree No. 08/ND-CP and some actions from the State Bank.
Of which, the real estate industry ranked second in the total value of corporate bond issuance recorded in the first 7 months of 2023 with VND 26,055 billion (accounting for 33%). Many businesses have successfully negotiated with bondholders to extend the debt repayment period.
However, despite signs of recovery, the pressure of maturity is still weighing heavily on many real estate businesses. Extending the debt repayment period is only a short-term measure, helping businesses have a "breathing time" to stabilize their business operations, in order to restructure their debt to gradually recover.
According to the Hanoi Stock Exchange, September is also an important time for bond maturity in 2023, when about VND41,000 billion of bonds are due - according to HNX. The list of businesses with delayed payments is still growing day by day. As of August 24, there were about 67 businesses on the list of late payment obligations for interest or principal of corporate bonds.
Many businesses face the risk of dissolution.
According to a recent survey by the Vietnam Association of Realtors (VARS), if the market situation continues to be as difficult as it is now, only 25% of businesses can survive until the end of the third quarter of 2023. If the difficulties last until the end of 2023, the number of real estate businesses facing bankruptcy will increase.
In addition, up to 20% of real estate trading floors are facing the risk of dissolution or bankruptcy, 40% of floors are struggling to survive, only operating with a few core staff. The rest are able to survive, but their resilience is not high.
Many real estate trading floors are still in the "dying" stage.
This survey also shows that up to 43% of surveyed businesses said that new mechanisms and policies issued since the beginning of 2023 have had a positive, very positive impact on real estate supply. Meanwhile, up to 57% of businesses assessed that these mechanisms and policies have only recorded a normal impact.
Regarding investor sentiment, survey data shows that only 21% of surveyed businesses assessed that the new mechanisms and policies issued since the beginning of 2023 have had a positive, very positive impact on investor sentiment. The remaining businesses all said that after a period of observation and monitoring, they did not see any real and clear changes in the market, so after stabilizing their psychology, investors are still extremely cautious before making decisions.
Regarding access to capital, more than 70% of businesses said that mechanisms and policies to remove difficulties in capital sources have not really had an impact on businesses. Meanwhile, the remaining 30% recorded the positive impact of these policies in the group that needs to solve issues related to bond issuance activities.
These figures show that, although in the past there have been many mechanisms and policies to remove difficulties for the market and real estate businesses, due to objective and subjective difficulties related to capital sources, financial leverage, and market factors, many businesses have fallen into a "dying" situation.
Many opinions say that, in order for real estate businesses to be able to absorb capital easily, market problems must be thoroughly resolved. In addition, capital attraction also needs to be exploited in many different channels, instead of focusing on traditional channels such as bonds, credit and mobilization from customers.
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