‘Corporate credit quality is still good’
According to Mr. Nguyen Quang Thuan, CEO of FiinGroup, there are businesses with extremely weak credit quality and being dealt with, but “generally it is still relatively safe”.
“That means there are a lot of good real estate businesses,” said Mr. Nguyen Quang Thuan at a symposium session within the framework of the Vietnam Economic Forum on the morning of June 5. FiinGroup is a leading company in the field of financial data and is one of the few businesses licensed to give credit ratings in Vietnam.
In the residential real estate market alone, Vietnam only has about 3,000 participating businesses, mainly concentrated in Ho Chi Minh City, according to FiinGroup’s calculations. The collected data shows that the debt-to-equity ratio of listed real estate enterprises has decreased signal.
Along with the interest coverage index, the borrowing and debt repayment capacity of enterprises is still relatively stable. However, the epidemic situation and legal issues affected the progress of projects, thereby limiting access to capital from channels.
Recently, there are news that credit to real estate will be tightened, making investors and experts worried. However, at the press conference on June 4, Deputy Governor of the State Bank Dao Minh Tu affirmed that only tight control of credit in a number of potential high-risk areas in real estate, not “tighten or cut” credit into these areas.
By mid-April, real estate loans increased by 10.19% compared to 2021, reaching more than 2.2 million billion VND. Real estate credit currently accounts for nearly 19.2% of the total credit of the economy; outstanding loans in this sector account for about one-third of the economy’s outstanding loans.
Mr. Nguyen Quang Thuan assessed, even if interest rates increase, he is not too worried. According to FiinGroup’s analysis, in the capital mobilization structure of residential real estate businesses, only 14% are bank loans, 17% are bonds. Meanwhile, money from prepaid customers accounts for 18% and other sources up to 51%.
“In fact, capital from business cooperation contracts between enterprises in the industry together or with buyers accounts for a large proportion, but sources from banks and bonds are not much. Therefore, it is important to pay attention to monitoring. those capital mobilization channels,” said Mr.
From a manager’s perspective, Mr. Do Manh Khoi, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) has a more cautious view. According to Mr. Khoi, the changing capital market will definitely affect the real estate market. In particular, when the bank adjusts its policy, the market reacts negatively.
“The capital structure for real estate investment is still problematic, so it is necessary to study policies to make this industry develop better,” he said.
Mr. Nguyen Duc Chi, Deputy Minister of Finance, said that over the past time, real estate businesses have mobilized a large amount of capital with high-interest bonds, but there are cases of lack of information and transparency. should affect their own financial situation and ability to repay debt.
Experts at the conference said that in the coming time, the capital source for real estate floor needs to continue to diversify, through the development of corporate bonds and the development of more channels such as trust funds and independent pension funds. , GHOST.
As a component of the economy’s “diamond quadrilateral” along with stocks, stocks, bonds, and credit, the real estate industry is said to be “fine” in terms of credit health but has a host of other problems.
Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association, said that the market has 5 big problems including: supply-demand mismatch in the lack of projects, especially affordable houses; phase difference in the segment when the luxury segment increased and the affordable segment did not.
House prices have increased continuously for the past 5 years; The real estate business investment environment is still “fuzzy” and not transparent. In addition, the real estate business community has businesses that lack capacity and have cultural problems.
Among these, the lack of supply is considered the main hot spot and causes housing prices to continue to escalate. Mr. Neil MacGregor, Managing Director of Savills Vietnam, cited the apartment market in Ho Chi Minh City in the first quarter of which only 2,150 units were open for sale.
“With a population of 10 million people, that’s not enough, so when it’s open for sale, it’s easy to absorb all. We will see prices increase even more until there is more supply,” said Neil MacGregor.
Meanwhile, Mr. Nguyen Duc Chi said that the real estate market in the first quarter had about 35,000 successful transactions, the market still increased in price because the supply did not meet the needs of the people. “But there is also an opinion that it is due to the hoarding of some investors,” he said.
Mr. Nguyen Quang Thuan added, the real estate industry is still challenged by the high cost of land, accounting for about 27% of the cost price. Along with that, the inflation situation caused the price of construction materials and design to increase, affecting cash flow.
Recommendation to gradually remove difficulties, Mr. Le Hoang Chau said, the key point is to make this market more transparent by legal institutions. Mr. Chau made 10 recommendations, mainly revolving around such issues as: respecting the right to access land for businesses, and having an effective bidding mechanism to avoid “red army”.
Along with that, the expert said that banks should not tighten real estate credit rigidly, but need a credit rating of the business; The policy should allow multi-industry real estate corporations to do general business accounting, that is, to allow profits from real estate to offset losses in other industries, similar to other industries.
Mr. Chau expressed his opinion that the ownership of an apartment should not be considered for 50-70 years to match the “thoughts and aspirations of the people, who consider the house as a valuable asset to bequeathed to their children and grandchildren”. .
Mr. Neil MacGregor recommends continuing to modernize and streamline regulatory and regulatory processes. In which, it is necessary to build an accurate land registration information system. All regulations on land registration need to be digitized. transparent and up to date.
“A real-life example in this regard is that Laos will soon introduce a land registration system in the near future,” he said. Along with that, the laws need to be arranged and organized reasonably and effectively to avoid overlapping. This will assist local authorities in approving projects and increasing land bank. According to experts, there are more than 10 laws directly and indirectly related to the real estate industry.
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