Enterprises hope to have difficulties in capital and project legality resolved

Entering 2024, businesses expect that when fiscal policies are implemented and the (amended) Laws come into effect, they will create synchronization, gradually removing difficulties and obstacles to help the real estate market recover and develop sustainably. TN&MT Newspaper reporters interviewed Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) on this issue.

2(1).jpg — Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association (HoREA)

PV: Sir, can you briefly describe the difficulties and challenges of the real estate market in the Southern region in general and Ho Chi Minh City in particular in 2023?

Mr. Le Hoang Chau:

In 2023, the real estate market in the Southern region in general and Ho Chi Minh City in particular faced many storms and difficulties, with a sharp decline in purchasing power and liquidity, lack of cash flow, lack of housing supply associated with an unreasonable housing product structure, lack of affordable housing, social housing for workers, etc.; housing prices increased continuously beyond the financial capacity of the majority of people, making it difficult to create housing.

The legal problems of real estate projects are the biggest bottleneck, accounting for 70% of the difficulties of enterprises. If there is no timely and effective solution, the real estate market may slide into recession. Therefore, some real estate corporations and enterprises must implement immediate solutions to save themselves and survive, such as reducing the scale of investment in production and business, streamlining the apparatus to the maximum, reducing the workforce, affecting social security issues, affecting the lives of many workers...

In addition, due to the blockage of credit capital, bond capital, and capital mobilized from customers, some real estate corporations and enterprises "starving for capital" have to borrow capital from the outside world at very high interest rates, full of risks, have to sell off assets, projects or sell residential real estate products at deep discounts, creating opportunities for customers to buy at cheaper prices, but also posing risks because they are products formed in the future.

PV: As the head of HoREA and also the representative of the voice of businesses, what recommendations do you have to help businesses overcome difficulties?

Mr. Le Hoang Chau:

Faced with the difficulties that the real estate market and businesses are facing, HoREA recommends that the Government and the State Bank create conditions for businesses, home buyers and investors to access credit capital for real estate projects, commercial housing, affordable housing projects, especially businesses with reputable brands, fulfilling tax obligations to the State, having projects that ensure legal factors, have been approved by competent state agencies, have good selling products, have good liquidity, helping to increase housing supply...

Regarding the social housing segment, HoREA recommends that provincial/municipal leaders continue to quickly and smoothly implement procedures for approving investment policies and real estate investors in cases where enterprises receive land fund transfers, without requiring 100% compliance with the 1/2000 planning. As for commercial housing projects that have been approved for 1/500 planning, which stipulates the obligation to reserve 20% of residential land fund for social housing construction before April 1, 2021, they should continue to be implemented without re-approval.

3(1).jpg — Expected real estate market will soon recover and develop again in 2024

PV: The year 2023 has ended, meaning the difficulties of the old year have passed. In 2024, what does HoREA expect about the recovery of the real estate market?

Mr. Le Hoang Chau:

Currently, although the real estate market is still very difficult, there is every reason to firmly affirm the prospect of recovery and continued growth in a safe, healthy and sustainable development direction in 2024. According to HoREA, the main driving forces to help the real estate market recover include:

Firstly, Resolution No. 18-NQ/TW dated June 16, 2022 of the Central Executive Committee directed the completion of the draft Land Law (amended) and related Laws to ensure consistency and unity, and competent State agencies are making efforts to remove "legal obstacles" which are the biggest obstacles of the real estate market; solving the legal problem will contribute to removing difficulties for hundreds of real estate projects, aiming to create an investment and business environment towards transparency, fairness, healthy competition, creating conditions for investors to have more favorable access to land, capital markets, and credit.

Resolution 41-NQ/TW dated October 10, 2023 of the Politburo "on building and promoting the role of Vietnamese entrepreneurs in the new era" has supported the spirit, created excitement and confidence for the Vietnamese business community in investment, production and business activities, including real estate.

Second, the “total demand” for housing to meet the real needs of society is still very large, especially the demand for affordable housing and social housing for the majority of middle-income and low-income people in society. Third, although people's income is currently generally decreasing, the middle class is still continuing its steady growth trend, which will be a sign of ensuring the recovery of the real estate market in 2024.

Along with the Government's efforts, the business community hopes that ministries and branches need to amend some "inadequate" regulations of sub-law documents to create a transparent, fair and equal investment and business environment, promote land resources, create favorable conditions for easy access to capital and credit markets and remove legal obstacles for about 1,000 real estate projects nationwide.

It can be affirmed that, in the past time, with great efforts of the Government, the central and local ministries and branches have directed to remove many difficulties and obstacles for the real estate market and real estate investment and business enterprises. We have the right to expect that in 2024, when fiscal policies are implemented and when the (amended) Laws come into effect, there will be synchronization, gradually removing difficulties and obstacles, helping the real estate market recover and develop sustainably.

PV: Thank you very much!

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