That is the affirmation of the leaders of the State Bank as well as many big banks at the seminar "Opening up capital for the real estate market " organized by Thanh Nien Newspaper in collaboration with the Green Economy Institute last morning (7.6) in Hanoi. HCMC.
Limit risks but create opportunities for real estate development
Speaking at the opening of the seminar, journalist Nguyen Ngoc Toan, Editor-in-Chief of Thanh Nien Newspaper , raised the question: Transactions in the real estate market are showing signs of stagnation due to the sudden tightening of credit lines. . Strictly controlling credit to be safe for the economy is an important task, but how to control it to limit risks, create opportunities for the real estate market to develop, and contribute to the recovery program. economic recovery of the country. In fact, not only real estate but all economic sectors in general, when the state "tightens" to deal with a local or momentary inadequacy, the related industries are immediately halted because most sectors in the economy are more or less closely related to each other. “Unfinished projects can't reach the finish line, moneybusinesses (DN) put in it will turn into trash and scrap. A new project that cannot be started will cause a shortage of housing supply in the market, prices will continue to be pushed up, and the dream of many people to settle down becomes increasingly distant. Without the works, a series of other industries such as iron and steel, furniture, construction ... will certainly stall," Mr. Nguyen Ngoc Toan concerns.
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The morning session of June 6 attracted many businesses, experts and banks
Sharing the reality of real estate companies' access to capital today, Mr. Nguyen Minh Nhat, General Director of Van Xuan Group, informed that all three main channels of capital mobilization of real estate enterprises are the issuance of bonds and stocks. ; investment funds (domestic and foreign); and credit from banks (NH) are entangled. In particular, the information that banks tightened credit also contributed to affecting customer psychology, making capital from this only interest-free channel (i.e. homebuyers paying according to the project progress) also affected. . “I went to the banks, each bank said a different style, so it was very confusing. Currently, Van Xuan has a loan of more than 2,000 billion VND waiting for the bank to disburse, but since March, the banks have said "out of room", June will disburse again but with a limited extent. Some banks stopped disbursing for customers to buy houses formed in the future. Enterprises survived the Covid-19 epidemicalready terrible luck. From now until the end of the year, real estate businesses need capital from the bank, but this kind of information makes us very insecure," reflected Mr. Nhat.
If the project is effectively exempted and has cash flow, the State Bank encourages banks to pay attention and lend. The real estate lending of commercial banks is based on the evaluation of the project's effectiveness and the investor's capacity.
Mr. Dao Minh Tu, Deputy Governor of the State Bank of Vietnam
Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA), confirmed: The real estate market is currently severely lacking in liquidity. There are many reasons why projects cannot be put on the market, products are scarce, while social needs and investors' needs are great, but the biggest difficulty of real estate businesses is capital. Specifically, the equity of enterprises according to the provisions of the Land Law is very low, accounting for only 15-20%, the remaining 80-85% must be mobilized from other channels. “The difficulty in accessing credit sources greatly affects the health of businesses. Credit is the foundation of the economy, the blood vessel, the oxygen tank, the oxygen tank of the real estate market. Without access to this source of capital, businesses almost suffocated, leading to suffocation. People are also extremely difficult," Chau emphasized.
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According to the State Bank of Vietnam, banks and businesses need to sit together to develop a healthy real estate market and create conditions for recovering the economy after the pandemic.
Mass control will cause many consequences
Take a lesson from ChinaAfter promulgating a policy to limit real estate credit at the end of 2020, financial economist - Assoc. , the Chinese real estate market began to lack supply, investors did not have money to pay construction contractors, causing ongoing projects to stall. The reason is, only 6.3% of enterprises meet the new regulations and are eligible for loans. Entering 2022, April home sales in the world's most populous country decreased by 49% over the same period last year; real estate investment decreased by 2.7%; Infrastructure investment decreased by 6.5%, unemployment increased very high up to 6.7%. Some figures suggest that China's growth has slowed significantly as a result of these effects. Not to mention, the unexpected supply shortage while the demand is still there has pushed home prices in China to rise again, The goal of tightening credit to keep house prices down is considered unsuccessful. The Chinese government had to change policies, encouraging some localities to reopen for credit in the real estate sector depending on the project situation. Thanks to the moves to loosen and clear capital flows, real estate transactions in China in May have gradually warmed up.
From the above studies, Assoc. Prof-Dr. Dinh Trong Thinh affirmed that real estate credit is one of the very important sources of capital, the lifeblood of the economy. If we continue to clamp down on real estate credit, the market will have some bad effects, greatly affecting growth. For some businesses that have a large need for investment credit, when the bank stops lending, a series of projects stop, which not only affects the supply of products to the market but also affects social employment. , as well as growth effects. For businesses that already have products that need costs to bring goods to market, if the loan is cut, the product cannot be sold, thereby turning into bad debt. Meanwhile, people who have the need to buy a house but do not have the financial capacity to pay a lump sum without access to a loan will slow down the home buying and selling process.
Observing the real estate market since April when the State Bank of Vietnam (SBV) implemented control measures with loans for investment in real estate business and bond activities tightened, Mr. Le Thanh, Chairman of the Board of Directors established the Institute of Green Economy, assessed that the market was in trouble, the supply was decreasing and falling short of the increasing demand. According to statistics from the Ministry of Construction, by the end of the first quarter, there were only 24 completed projects, equaling 47% compared to the fourth quarter of 2021 and about 54% compared to the same period in 2021. Number of projects eligible to open sold only 56 projects, down by two thirds compared to the fourth quarter of 2021 - the time before there were fluctuations in credit supply for real estate. “House prices soar, supply is scarce, the market is stagnant plus the piling up difficulties of the post- Covid environment-19 caused the real estate sector in Ho Chi Minh City - one of the most dynamic economic centers in the country - to grow negative 12.6%. In the current context of dual difficulties, the control of capital flows has not been scientifically oriented, in accordance with the objective laws of the market, will not create conditions for private economic resources to develop. development," warned Mr. Le Thanh.
Sharing the same opinion, economist Huynh Phuoc Nghia, University of Economics Ho Chi Minh City, also emphasized that real estate plays an important role in economic development., is an attractive market in terms of capital attraction. Studies show that investing 1 USD in real estate will generate 1.5 - 2 USD for the economy because real estate is an output product for 200 - 250 other industries. This market is also an important investment channel contributing to Vietnam's economic recovery after 2 years of congestion due to Covid-19. “I meet many real estate developers who only like to invest in small projects with an area of 1-2 hectares because it is easy to raise capital and quickly sell out to recover capital to invest in new projects. As for large-scale projects up to 500-600 hectares, they face many difficulties in both capital mobilization and liquidity. The real estate market therefore lacks creativity and unsustainable development. Real estate is a fundamental market for markets, so there is a need for long-term investment, priority and balance, and stability in capital to create opportunities for all industries," Nghia suggested.
By Thanhnien.com.vn