 |
| The real estate market is gradually recovering and has passed the 'bottom'. (Source: Dan Tri) |
The market has passed the "bottom"
The real estate market report for the first 10 months of 2023 by the Ho Chi Minh City Real Estate Association (HoREA) - stated that the market has passed the "bottom", however, overall, the real estate market is still very difficult, but the level of difficulty tends to decrease over time, the following month is better than the previous month, the following quarter is better than the previous quarter.
According to Mr. Le Hoang Chau - Chairman of HoREA - the above assessment is very clear in the real estate market of Ho Chi Minh City. Because, in the first quarter of this year, real estate growth was negative 16.2%, but at the end of the third quarter, although it was still negative 8.71%, it had decreased by 2.87% compared to the first 6 months of the year. After 9 months, the difficulty level of the real estate market has decreased by 42.3% compared to the first quarter.
According to Mr. Chau, in the first 9 months of this year, the housing supply in Ho Chi Minh City had 13 commercial housing projects eligible to mobilize capital with 15,020 units, an increase of 1.37 times over the same period in 2022, but mobilized revenue decreased by 4.7%.
Specifically, the total of 13 projects has 13,767 apartments (accounting for 91.6%) and 1,253 low-rise houses (accounting for 8.4%), of which the high-end housing segment has 9,969 units, accounting for 66.37% (higher than the national rate of 58%), the rest is the mid-range housing segment with 5,051 units, accounting for 33.63% (higher than the national rate of 26%). The market continues to be in a state of no affordable housing, nor is there any more social housing.
According to Mr. Chau, the real estate market in the country and Ho Chi Minh City continues to be "out of balance between supply and demand", with a lack of project supply leading to a lack of housing supply, especially a lack of affordable housing and social housing.
Notably, according to the Chairman of HoREA, housing prices have been increasing continuously since 2017 and are still "high" beyond the financial capacity of middle-income earners, low-income urban people, officials, civil servants, state employees, armed forces officers, workers and immigrants.
"For an affordable apartment costing 2-3 billion VND, even a person with a low-average income, with savings of about 100 million VND/year, would need about 25 years to be able to buy a house," Mr. Chau analyzed.
In an overall assessment of the real estate market, according to Mr. Hoang Hai - Director of the Department of Housing and Real Estate Market Management (Ministry of Construction), the efforts from the Government, ministries, banking system and businesses, brokers themselves... have contributed positively to "maintaining" the real estate market. Although the market is not strong enough to "overcome the slope", it has basically escaped the risk of "losing the brakes" and is regaining momentum.
Bond maturity pressure still surrounds businesses
According to data from the Vietnam Bond Market Association (VBMA), the total value of corporate bond issuance in the first 10 months was recorded at VND209,150 billion. This shows that capital mobilization activities from the bond channel have improved compared to 2022.
Of which, the banking sector dominates with VND99,023 billion (accounting for 47.3% of the total value). Next is the real estate group with VND68,256 billion (accounting for 32.6%).
However, research by the Vietnam Association of Realtors (VARS) shows that the pressure of bond maturity is still "surrounding" real estate businesses. The total value of newly issued and repurchased real estate bonds is still very low compared to the total value of maturing corporate bonds.
Accordingly, in 2022, real estate enterprises bought back about 219,000 billion VND. In the first 10 months, enterprises bought back about 153,800 billion VND. Meanwhile, the total value of bonds maturing in the real estate group in the last 2 months of 2023 and 2024 reached 15,600 billion VND and 121,100 billion VND, respectively.
The list of enterprises that are late in paying their bond debt obligations is increasing day by day, especially in the real estate group. According to the Hanoi Stock Exchange, as of October 3, there were about 69 enterprises on the list of enterprises that were late in paying interest or principal on corporate bonds with a total outstanding debt of about VND176,100 billion, accounting for about 17.8% of outstanding corporate bond debt in the whole market.
Faced with the pressure of bond maturity, in order to have time to restructure cash flow and improve debt repayment capacity, VARS believes that negotiating to extend the time is the first choice of real estate businesses in the context of difficulty in accessing credit capital and the market has not fully recovered. Negotiations for extension have been active with quite successful results since April.
According to the Hanoi Stock Exchange, as of October 3, more than 50 issuers had reached agreements to extend bond terms with a total value of more than VND95,200 billion. The maturity date was mainly adjusted by 2 years, pushing back debt repayment pressure to the 2025-2026 period.
VARS assesses that negotiating bond extensions will continue to be a trend in the coming time. However, difficulties still lie ahead, extending the debt repayment period only helps businesses have time to stabilize production, business and restructure corporate debt to recover. Basically, it is just transferring debt from one time to another.
To avoid the risk of bankruptcy, businesses need to take advantage of this time to restructure their debts. They must seriously consider selling off assets, even accepting break-even or losses to have cash flow to pay off debts and complete projects that can be liquidated immediately upon being launched on the market.
In addition, in addition to familiar financial sources (bank credit and corporate bonds), there should be mechanisms and policies to develop, attract and ensure effective operation of capital sources from other financial products (real estate investment funds - REIT, housing savings funds, real estate securitization...), or other channels (direct and indirect foreign investment).
Stop investment policy for project N14, N15 Le Van Luong street, Hanoi
The Hanoi People's Committee has directed to stop implementing the investment policy decision for the N14 and N15 Le Van Luong Street project after many years of delay. This is a mixed-use public service and housing construction investment project, in which the investor is Louis Investment and Trading Joint Stock Company.
 |
| Land plot N14, N15 Le Van Luong street, Hanoi. (Source: BXD) |
Regarding the N14, N15 project on Le Van Luong Street, in the latest report responding to voters, the Hanoi People's Committee said that land plots N14, N15 have a total area of 12,561m2, and the city approved the investment policy in August 2016. This is a mixed-use public service and housing investment project, the investor is Louis Investment and Trade Joint Stock Company.
During the process of site clearance, the project received complaints. Based on the report of the Hanoi City Inspectorate and considering the complaints, in February 2020, the Hanoi City People's Committee directed to stop implementing the investment policy decision of this project. Regarding the handling of the existing contents of the project, the city assigned departments, branches and sectors to review current regulations to advise and propose.
It is known that the N14 and N15 project land is located in the planning block with the symbol QH 46, in Trung Hoa ward, Cau Giay district. The southwest of the project borders Hoang Ngan street, the northwest borders Le Van Luong street. Land blocks N14 and N15 were previously named land blocks 5.1-NO and 5.5-NO. Since 2018, households in the project area have received land recovery decisions. According to records, a part of the project land has been cleared and fenced with corrugated iron.
Legal value of red book and pink book
According to regulations, land use right certificates issued before December 10, 2009 are still legally valid and do not need to be converted into certificates of land use rights, house ownership rights and other assets attached to land. In terms of legal value, red books and pink books have the same legal value.
Red book, pink book are terms used to refer to documents on land use rights, based on the external color of the land use rights certificate.
In Vietnam, for each different period, the land use right certificate has different names. Specifically: Land use right certificate. Certificate of house ownership and land use right. Certificate of house ownership.
Since 2009, the Ministry of Natural Resources and Environment has issued a new certificate form applicable nationwide called Certificate of land use rights, house ownership rights and other assets attached to land (the certificate has a pink cover or is also known as the pink book).
Article 97 of the 2013 Land Law stipulates that certificates of land use rights, house ownership rights and other assets attached to land are issued to people with land use rights, house ownership rights, and ownership rights of other assets attached to land according to a unified form throughout the country.
Land use right certificates issued before December 10, 2009 are still legally valid and do not need to be converted to certificates of land use rights, house ownership rights and other assets attached to land.
Certificates issued before December 10, 2009 that need to be changed can be changed to certificates of land use rights, house ownership rights and other assets attached to land. Thus, in terms of legal value, red books and pink books have the same legal value.
According to the provisions of Clause 40, Article 2 of Decree 01/2017/ND-CP, the time to process applications for red books and pink books shall not exceed 30 days from the date of receipt of valid applications; not exceeding 40 days for mountainous communes, islands, remote areas, areas with difficult socio-economic conditions, and areas with especially difficult socio-economic conditions.
Source
Comment (0)