Real estate bonds are making a comeback and a series of positive signals from the market

About 30,000 billion VND of real estate corporate bonds were issued in the first 6 months of the year.

According to the records on the corporate bond market, if during April, May and the first half of June, the real estate business group was almost absent, the market only recorded a few large businesses issuing bonds such as Vinhomes, Vingroup, then by the last week of June, a number of real estate businesses had issued bonds, raising capital again through this channel.

Accordingly, there are 5 real estate enterprises that successfully issued bonds, including: Industrial Development and Investment Corporation - JSC (Becamex IDC, code: BCM) successfully raised 1,500 billion VND; Nam Long Investment JSC (Code: NLG) successfully raised 550 billion VND; Trung Minh Urban Area LLC raised 200 billion VND; Khai Hoan Land Group JSC (Code: KHG) raised 250 billion VND; Vinhomes JSC (Code: VMH) successfully raised 2,500 billion VND.

It is estimated that in the first half of 2024, about 30,000 billion VND of bonds in the real estate - construction group will be successfully issued.

Notably, the average interest rate of real estate bonds is at the highest level in the market, averaging from 9% - 12.5%. In particular, some enterprises such as Khai Hoan Land, issue bonds with interest rates up to 12% - 13.5%/year. Meanwhile, the group of bank bonds only has interest rates from 4.7 - 7.4%.

The enterprises issuing the largest value include Vinhomes (VND12,500 billion), Vingroup (VND10,000 billion) and Hai Dang Real Estate Investment and Development Company Limited (VND2,500 billion).

Assessing the current corporate bond market, Dr. Can Van Luc - economic expert - commented that the positive developments of the corporate bond market show that this market is gradually regaining public confidence.

According to Mr. Luc, the reason is that the capital demand, especially medium and long-term capital of enterprises, when the economy recovers, is at a very high level. Besides, confidence in the market is gradually returning. However, compared to expectations, the above recovery is still not commensurate.

A series of good signals from the real estate market

According to information from the State Bank of Vietnam, changes in the real estate market in recent months and real estate credit growth have reflected growth trends in the coming time.

Accordingly, real estate credit in Ho Chi Minh City maintained a positive growth rate in the last 3 months. March increased by 0.96%, April increased by 1.15% and May increased by 1.15%.

On the other hand, positive developments in the macroeconomic situation also have a great impact on the overall recovery of the real estate market in 2024.

Of which, Vietnam's consumer price index (CPI) in the first 5 months of the year remained at 4.03%. This achieved the target assigned by the Prime Minister and the National Assembly at the beginning of the year.

Besides, the lending interest rates of banks are currently quite low, creating great conditions for businesses and people. That is also a great advantage for the current real estate market.

Public investment activities continue to be promoted, in which Hanoi is expected to implement 11 key transport projects, changing the face of the capital. In the South, localities have launched the Beltway 4 project passing through many southern provinces and cities, which is a great driving force, expected to contribute to helping the real estate market become vibrant again.

In particular, the laws passed include the Land Law and the Real Estate Business Law, which will create a legal corridor to clear up deadlocks and obstacles in the real estate market.

Commenting on the real estate market, Mr. Vo Hong Thang - Investment Director of DKRA Group - commented that from now until the last 6 months of the year and possibly until early 2025, the market will likely have certain bright spots, however, for the market to break through, it will take time.

For the market to have clear improvements, Mr. Thang predicts that it will fall in the second quarter of 2025 when the Land Law, Real Estate Business Law, and Housing Law are officially applied to practical life.

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