At a conference to discuss solutions to remove difficulties in credit growth for production and business held last weekend, Prime Minister Pham Minh Chinh said that real estate enterprises are complaining about difficulty in accessing capital.
But in recent years, real estate prices have generally increased. If there are difficulties but people still want to keep the selling price the same and still demand one-sidedness, is there a shared responsibility?
Want to reduce but not easy
Previously, in a meeting on "Continuing to resolutely implement solutions to develop a safe and healthy real estate market" in November, State Bank Governor Nguyen Thi Hong also said that real estate businesses need to consider reducing selling prices.
"Real estate enterprises and corporations themselves need to follow the direction of the Government in Resolution No. 33, which is to manage enterprises well, balance profit targets, product structure, consider reducing selling prices... Then, along with solutions from ministries, branches and localities, it will encourage investment demand in this market" - the Governor recommended.
A housing project under construction in Ho Chi Minh City. Photo: TAN THANH
The General Director of a large bank also said that real estate enterprises need to look back and change themselves, to see if they are operating healthily and transparently. If in the past, real estate enterprises accumulated many projects during the period of easy capital mobilization, then when the time comes, they need to sell off assets, accept break-even or a small loss, and coordinate with banks to pay off debts, instead of sitting still waiting for banks to support and extend...
However, speaking with a reporter from Nguoi Lao Dong Newspaper, the general director of a real estate company said that the company really wants to sell the project to pay off debt, even not wanting to do real estate anymore, but it is not easy, mainly because the project is entangled in legal issues, regulations on transfer... If the project continues, when the product is released to the market, the price cannot be cheap because it has to bear a lot of costs.
As someone who closely follows the developments of the market and real estate businesses, Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, said that in recent times, real estate businesses have made great efforts to save themselves and survive. When businesses are a little more stable, they are also looking for ways to revive the market to find a source of income.
In fact, enterprises have proactively reduced product prices and project transfer prices to recover capital in one way or another, but few investors have publicly announced it. "As far as I know, the transfer prices of many projects have decreased by 20%-30% compared to last year. In some projects, investors were even forced to reduce prices by 40%-50% because of the difficulties.
In the primary market, for products sold directly to customers, businesses cannot announce price reductions compared to before, but instead implement them by offering preferential policies such as promotions, price discounts of 5%-10%, flexible payment, loan interest support, high discounts if customers pay early... In general, these policies have indirectly reduced 20%-30% compared to market prices" - Mr. Quang acknowledged.
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, also said that real estate price reductions are not uncommon, but there has been a phenomenon of "vultures" looking for "corpses" and buying back projects at very cheap prices.
Too many barriers
However, in the long term, experts say it is very difficult to reduce the real estate price level because the market not only has domestic enterprises but also many foreign investors. Accordingly, foreign corporations investing in projects often choose high segments, good locations, complete legal documents and higher product quality than projects of domestic investors, so prices cannot be low.
When selling products to the market, they always calculate the output for 2-3 years later, so the price is often very high. Foreign enterprises have advantages in capital and capital costs, so they are not under pressure to reduce selling prices.
According to Mr. Tran Khanh Quang, a major obstacle that makes it difficult to reduce real estate prices is that investment costs are too high. "In the current project cost structure, construction costs have nearly doubled compared to 4-5 years ago, from 7-7.5 million VND/m3 to more than 12 million VND/m2.
Land prices can increase or decrease, but only account for 15%-20% of the total cost, while construction costs account for nearly 40% of the total cost, in addition to many other types of costs," Mr. Quang cited.
Meanwhile, the general director of a real estate company with an unfinished project in Ho Chi Minh City acknowledged that the legal entanglement that has lasted for the past few years has made the source of completed real estate projects quite rare. Enterprises struggling with old projects, with almost no new products to sell while demand is still very high, is also the reason for the high increase in housing prices.
In addition, inflation and high interest rates are also reasons why real estate prices are difficult to reduce. "In case of having to reduce prices, it will definitely be a very deep loss because the company cannot bear the increasing costs for the project" - the general director of this company said.
Mr. Le Huu Nghia, General Director of Le Thanh Construction Trading Company, cited the reality of his company's social housing project, although the leaders of Ho Chi Minh City had a policy to adjust the planning, the company repeatedly requested permission to adjust, but this department pushed it to another department, and so far the project has not been implemented. "If the project's procedures are prolonged, costs increase, it will be difficult for the company to reduce prices," said Mr. Nghia.
(*) See Lao Dong Newspaper from issue dated December 12
Focus on removing obstacles
Mr. Hoang Hai, Director of the Department of Housing and Real Estate Market Management ( Ministry of Construction ), said that in order to remove difficulties for the market and real estate enterprises, in the coming time, ministries, branches and localities still need to focus on reviewing and removing obstacles to complete investment preparation procedures, selecting investors to implement real estate projects, commercial housing projects, social housing projects according to the provisions of the law on land, the law on housing, the law on investment to increase the supply of housing, promote the development of the real estate market in the area.
Focus on removing difficulties and promoting the development of the real estate market for both sellers and buyers. Monitor and grasp information and developments of the market and take timely measures to stabilize the market.
V. Duan
Source: https://nld.com.vn/gia-nha-van-cao-ngat-nguong-nguoi-trong-cuoc-len-tieng-19623121220570056.htm
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