On February 8, in Hanoi , the State Bank of Vietnam (SBV) held a Real Estate Credit Conference with the participation of many real estate enterprises, commercial banks, business associations and banking associations, representatives of leaders of ministries, branches...
Enterprises propose debt restructuring and debt extension
At the conference, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that the State Bank of Vietnam has not issued any documents or statements on tightening real estate lending, but has directed strict control of credit for some risky segments such as segments with high speculative rates... to ensure system safety. As for credit serving legitimate purposes of home buyers, it is guaranteed to be fair like other sectors.
According to the latest statistics, the outstanding debt of TDBDS by the end of 2022 was about 2.58 million billion VND, an increase of about 24.27% compared to the end of 2021, one of the highest growth sectors and accounting for a large proportion of 21.2% of the total outstanding debt for the economy , the highest in the past 5 years. Thus, it can be seen that currently, banks are still providing credit to the real estate sector with high growth and large outstanding debt. For projects, feasible loan plans are lent in accordance with regulations.
Representatives of corporations and real estate enterprises such as Vingroup, Novaland, Hung Thinh Land, Sun Group , Ho Chi Minh City Real Estate Association... raised about 17 recommendations, focusing on issues such as: debt restructuring, debt extension, interest rate reduction, risk coefficient reduction for real estate, increasing the loan-to-value ratio of collateral assets, supporting businesses in their ability to repay bondholders... Mr. Pham Thieu Hoa, Chairman of the Board of Directors of Vinhomes (Vingroup), requested the State Bank and banks to remove obstacles regarding loan purposes and disbursement forms in guiding documents, and take measures to remove mechanisms related to the classification and control of lending in real estate.
In addition, business representatives said that it is necessary to supplement specific policy mechanisms for large investors and key projects with full legal documents to avoid leveling. At the same time, there should be measures to gradually reduce interest rates to support financial capacity for people and investors. Representative of Novaland, Ms. Do Thi Phuong Lan, Director in charge of restructuring of the group, hopes that the State Bank will consider allowing real estate corporations to restructure debt and extend debt for 24 - 36 months.
Mr. Le Trong Khuong, General Director of Hung Thinh Land, also pointed out that the problem of debt group jumping may occur in the current situation. According to Mr. Khuong, there needs to be a drastic and specific policy, proposing that the authorities allow debt restructuring and extension to avoid debt jumping. This will also support the disbursement of subsequent debts for enterprises to produce and do business. Mr. Khuong also proposed to expand the room so that enterprises have capital for business, thereby increasing the confidence of bondholders so that they continue to invest in corporate bonds.
State Bank Governor Nguyen Thi Hong speaks at the conference. Photo: Hai Yen
Interest rates will be reduced.
Reducing lending interest rates is one of the contents that many businesses have proposed. Regarding this issue, Vietcombank General Director Nguyen Thanh Tung said that right before the conference, general directors of commercial banks had agreed to thoroughly implement the direction of the State Bank; agreed to further reduce mobilization interest rates to gradually reduce lending interest rates, including interest rates for real estate businesses to support businesses and the market.
Regarding the proposal to restructure the debt repayment period and maintain the debt group for real estate enterprises, a bank representative said that it is necessary to evaluate and consider carefully from the perspective of safety in controlling bad debt of the banking industry. At the same time, it is difficult to come up with a preferential mechanism specifically for real estate enterprises, because other industries also "demand" similar mechanisms.
Concluding the conference, Governor of the State Bank of Vietnam Nguyen Thi Hong directed the banking system to make maximum efforts to reduce interest rates, make efforts to lend to good projects, social housing projects... Emphasizing that if credit is concentrated on enterprises that are the backyard with a large concentration level, it will be very risky, the Governor requested banks to control the level of credit concentration on a number of large customers and customer groups, customers related to major shareholders, cross-lending...
Regarding the proposal to reduce the risk coefficient for real estate as well as the roadmap to tighten the ratio of short-term capital use for medium and long-term loans, the Governor said that applying a high risk weight for real estate is to control the difference in terms of banks. Banks are experiencing an imbalance in terms of terms when lending to real estate (90% of real estate loans are medium and long-term loans while capital mobilization accounts for 80% of short-term). The roadmap to tighten the risk coefficient for medium and long-term capital use also has a similar purpose.
According to the Governor of the State Bank, 70% of the current difficulties of real estate enterprises are in the legal procedures. Therefore, to solve the difficulties of the real estate market, it is necessary to coordinate many different policies and solutions. The Governor also sent a message to real estate enterprises, hoping that enterprises need to manage their cash flow systematically, have forecasts to be proactive in all situations. In addition to the solutions from ministries, branches, and management agencies, enterprises themselves need to re-manage, balance between revenue targets, profits, and product consumption capacity to make appropriate adjustments to be able to repay bank loans.
The government is interested in directing real estate credit to low-cost housing, housing for workers, social housing... requiring businesses to actively participate in implementation.
Ministry of Construction amends 2 draft laws
According to Deputy Minister of Construction Nguyen Van Sinh, in the past 3 years, real estate investment has increased. However, in the fourth quarter, real estate enterprises still faced many difficulties due to many reasons, including institutional and legal reasons in the real estate sector. The Ministry of Construction is presiding over the revision of two drafts of the Housing Law and the Real Estate Business Law, and there will be many policies to overcome these difficulties. There are many problems that are being proposed to the National Assembly for timely resolution to promote the development of the real estate market.
Dr. Le Dat Chi - University of Economics Ho Chi Minh City:
Real estate enterprises must use capital for the right purpose.
The State Bank of Vietnam has affirmed that it will not tighten credit in real estate, but it is important that real estate enterprises prove the purpose of using capital. In the past, they relied on bonds, but now that it is difficult to issue bonds, banks will not buy back bonds because of "room". Misappropriation leading to bad debt will affect commercial banks, but if enterprises invest in buying corporate bonds and use capital arbitrarily and not for the right purpose, it is also not good. Therefore, the consideration of debt collection, debt extension or opening "room" is arranged by banks.
Economist, Dr. Nguyen Tri Hieu:
Special loan program needed
The real estate market is partially frozen due to lack of capital to continue implementing projects; when lacking capital, businesses also want to sell assets, but real estate in many localities has fallen in price, so it is not easy to handle. Therefore, capital is needed for the real estate market, which currently mainly comes from credit capital. However, commercial banks are also concerned about bad debt from real estate in the context of poor liquidity, and even some real estate corporate bond debts may fall into "default"... Some real estate businesses facing difficulties or "defaulting" can have a chain reaction impact on the entire market. However, let the market self-clean because not only real estate, many other sectors are also facing difficulties. In return, some solutions can be applied to remove difficulties in credit capital such as special loan programs aimed at some reputable and potential real estate businesses, focusing on customers with the ability to repay debts. Regarding specific support programs, in the past, the Government and the State Bank of Vietnam implemented a credit package of 30,000 billion VND to support low-interest loans for buying commercial housing, social housing, etc.
Ms. Do Thi Phuong Lan, Director in charge of restructuring of Novaland Group:
Resolve legal problems at their root
The impact of COVID-19 in the past 2 years and the disruption of the bond market along with the recent monetary tightening have worn down the strength of real estate businesses. Supporting interest rates to a suitable level will help the market recover, help real estate businesses increase their endurance, have time to resolve project legal issues and continue to develop; extend the term of bonds for real estate and construction businesses with a maximum term of 3 years to "reduce pressure and increase confidence" in the market. Restructure the debt of individuals borrowing to buy real estate whose interest payments are supported by investors and consider reducing lending interest rates for individual customers. The government needs to have timely solutions to support the radical resolution of legal problems caused by overlapping laws, and to price land use fees according to a simple and transparent coefficient K so that projects can continue to be implemented quickly, reducing costs to help lower product prices.
Son Nhung - Thai Phuong recorded
Source: https://nld.com.vn/thoi-su/go-kho-thi-truong-bat-dong-san-20230208222723752.htm
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