In an environment of deep profit decline and high project legal risks, Mr. Nguyen Quang Thuan - Chairman of FiinGroup assessed that capital channels for real estate are facing great challenges.
Firstly, bank credit capital is controlled for credit risk, has high credit risk and gives rise to high project legal risk stories.
Second, the corporate bond channel is involved in high debt default events, causing low investor confidence in corporate bond products. Foreign capital/FDI in real estate is affected by the high international interest rate environment.
Third, the source of money from down payment buyers is narrowing due to high real estate prices and homebuyers' incomes are also affected in the difficult economic context. Meanwhile, the interest rate of home loans has been on a downward trend recently but there are still risks from legal and floating mechanisms.
Finally, capital from business cooperation must face the State Bank's policy of controlling credit risks regarding the use of borrowing purposes, limiting capital contributions and business cooperation according to Circulars. At the same time, Decree 65 also limits the purpose of bond issuance.
Accordingly, the Chairman of FiinGroup said that in the context of the difficult real estate market, the execution and sales capabilities of real estate developers were significantly affected, as shown by the sharp decrease in the ratio of prepaid revenue/inventory in the first 9 months of 2023.
As a result, the financial health and liquidity of real estate businesses also weakened as the pressure to repay debt and principal was high while cash flow from business operations was not enough to meet the demand.
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