Real estate businesses struggle when capital flows are blocked
Report of the Vietnam Bond Market Association (VBMA), in April, after the Prime Minister requested the Ministry of Finance to closely monitor bond issuance activities, there was no capital mobilization by real estate enterprises. produce. This development was in stark contrast to the issuance in March when real estate companies led the share of issuance value with 46.7%, followed by banks and businesses in other industries.
Explaining this phenomenon, Lawyer Truong Thanh Duc, Director of ANVI Law Firm, said that this is a very clear response to the policy of tightening credit and bond capital flows to the real estate sector in recent times. .
“Real estate is a field that always needs capital and so are businesses in this industry. Over the past few years, real estate businesses have issued a lot of bonds to implement and expand projects. However, recently, the tightening of management has caused this market to stagnate, almost no new projects have been implemented,” emphasized Mr. Duc.
With the same opinion, financial expert Can Van Luc also stated that if too much credit is tightened in real estate, at the same time, the bond market can cause the entire real estate market to disrupt capital. Real estate is an important sector of the economy, when the market is quiet, freezing will negatively affect dozens of related fields.
According to reflections from many real estate businesses, the refusal to provide capital, even interrupting the credit line in the middle, causes many businesses to fall into a state of “capital hunger”, without the cost of creating a land fund, the cost of development. declaration of investment procedures, clearance and compensation. The sudden blocking of capital inflow to real estate makes many projects impossible to implement, further limiting the scarce housing supply. As a result, housing prices skyrocketed.
“Businesses, after 2 years of fighting Covid-19, real estate businesses have been almost exhausted. When the new market gradually recovered, both credit capital and bonds were immediately blocked at the same time. A lot of people. Enterprises are falling into the “half-baked life” situation when on the one hand they do not have capital to implement the project, on the other hand cannot produce goods for sale due to legal and legal problems”, a business leader said. know.
More dangerously, the shortage of capital for real estate development is expected to continue. “The real estate market may continue to face difficulties as it is waiting for changes in policy and legislation to be issued by state management agencies in the near future. In this context, the supply of real estate will continued to be scarce,” confirmed the real estate industry report of VnDirect.
In fact, the supply shortage of the real estate market has been detected and warned continuously from 2020 up to now. A series of projects could not budge because of mechanisms and policies, no one dared to approve. Now, if the business is cut off credit, the projects that are approved will not be able to deploy.
According to experts, the policy that decides to tighten real estate credit will have a certain influence on both supply and demand of the market. This may lead to the delay of ongoing and upcoming projects. Therefore, authorities and credit institutions need to come up with appropriate solutions to control credit growth, towards the healthy growth of the real estate market in the coming time.
Credit in Vietnam’s real estate is still at a reasonable level, the Government can control capital flows into the market, but it should not be tightened, affecting the stable and sustainable development of real estate and the whole economy. “, said Mr. Can Van Luc.
Mr. Luc also added that the control roadmap needs to be reasonable with capital flows into the market and real estate segments, especially giving priority to 3 main segments: Prioritizing credit flows for projects that are starting to develop. open to the real estate market to soon have supply, solve the imbalance of supply and demand; prioritizing capital flows for social housing projects, affordable housing, meeting market demand; accelerate the disbursement of public investment capital, create conditions for the real estate market and the economy to develop.
Regarding the impact of capital on the real estate market, experts also said there were lessons from countries around the world. Most recently, in the face of a slumping market, China has asked three major private property developers, Country Garden, Longfor Group and Midea Real Estate to issue more bonds, some banks have been approved by agencies. management requests to buy those bonds.
Analysts say corporate bonds protected by credit risk management tools will encourage the market to engage in debt issuance. China is now accelerating the recovery of real estate demand by further lowering lending rates for first-time homebuyers.
It is known that China’s real estate sector has been affected by a series of defaults and requests to extend payment periods. Many developers say they have not received new lines of credit from banks, despite repeated assurances from policymakers and regulators that they will help the sector avoid default and will Ask banks to extend loans.
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