Hot about real estate corporate bonds, Deputy Minister of Finance said “surprise”

The morning of June 5 in the city. In Ho Chi Minh City, the Central Economic Committee chaired the organization of the fourth Vietnam Economic Forum with the theme “Building an independent and self-reliant economy associated with deep economic integration in the new situation”.

At the Forum, participating in the opening speech of the symposium 2: “Development of the capital market and the real estate market”, Deputy Minister of Finance Nguyen Duc Chi said, as a capital channel, the market The capital market is an important channel for real estate businesses to mobilize medium and long-term capital, in line with the investment nature of real estate projects.

Along with the development of the economy, the capital market and the real estate market have a close relationship with each other and complement each other’s development.

“The risks of this market may affect the sustainable development of the remaining market. Therefore, it is necessary to evaluate and recognize the development of both markets in order to have appropriate development solutions. appropriate, minimizing possible risks”, Mr. Chi emphasized in his speech.

Deputy Minister Nguyen Duc Chi informed that for the capital market, in the period 2016-2021, the capital market has had a rapid development, making an important contribution to the restructuring of public debt and public investment, the process of equitization. state-owned enterprises and contribute to the overall development of the economy.

Besides, market components including stock market, bond market, and derivatives market all achieved high growth rates, which is the basis for the market to continue developing in the period from now on. to 2025.

Accordingly, the size of the capital market grows at an average rate of 28.5%/year in the period 2016-2021. By the end of the first quarter of 2022, the capital market size will reach 134.5% of GDP in 2021, 3.5 times the size of 2015. In which, the size of the stock market will be equivalent to 93.8% of GDP; the size of the bond market reaches 40.7% of GDP (of which government bonds are 22.7% of GDP and corporate bonds are 16.4% of GDP).

Since the beginning of April 2022, the market has had many adjustments, in which stocks of real estate companies have adjusted the most; The issuance of corporate bonds of real estate enterprises has grown rapidly in scale, but there have also arisen many risks and inadequacies. This issue needs to be looked at and assessed more deeply in order to have a solution to develop the market sustainably in the coming time.

As for the real estate market, according to a report of the Ministry of Construction, in 2021, the whole country has 282,105 successful real estate transactions, of which the number of transactions of apartments and individual houses is 111,640 transactions.

Although the economy was affected by the pandemic, the prices of real estate, houses and land plots continuously increased from the beginning of 2021, by the end of 2021, the price of apartments has increased by 5-7% on average; the price of individual houses in the project increased by 15-20%; the price of land plots increased by 20-30% compared to the end of 2020. In the first quarter of 2022, the number of transactions of apartments and individual houses: 20,325 successful transactions, only about 45.5% compared to that of the end of 2020. The fourth quarter of 2021 and equal to about 80% of the same period in 2021.

The increase in prices in the real estate market is thought to be due to supply and demand factors, the supply of the market has not met the needs of the people, leading to an increase in house prices (the people’s demand for housing increases in the context of urbanisation). Rapid urbanization is the general trend of development). But there is also an opinion that the increase in house prices is due to speculation and hoarding of a part of investors.

Faced with the above situation, Deputy Minister Nguyen Duc Chi assessed that, despite the rapid growth, common contributions to the development of the country, the capital market and the real estate market still exist, limitations need to be addressed. analysis and clarification to overcome in the near future.

Specifically, for the capital market, it can be seen that the market has not developed deeply and is easily affected by psychological factors and the influence of international financial and monetary markets.

As for the real estate market, the land auction case in Thu Thiem Urban Area – Ho Chi Minh City has shown that there are still certain limitations in terms of: Land use planning, land valuation, tax, credit, etc. collection of land use fees, compensation, site clearance, resettlement, land administration procedures as well as legal regulations on real estate business.

The mobilization of capital by real estate enterprises through the issuance of corporate bonds also has potential risks for the financial market in general and the capital market and the real estate market in particular due to the lack of information and poor information on the issuance of high-interest corporate bonds. transparency, which can affect the financial situation of real estate enterprises, the consequences of low capital use and unfavorable real estate market also make it difficult for the cash flow to repay corporate bonds due…

Accordingly, it is necessary to have solutions to develop a healthy capital market and real estate market, from perfecting the legal framework (Security Law, Enterprise Law, Construction Law, Land Law, Housing Law) , Law on Real Estate Business and guiding documents…) to deploy solutions for operating, managing and monitoring the market.