Real estate businesses struggle because banks stop disbursing

Loan approved but not disbursed

Speaking at the seminar “Opening up capital for the real estate market”, Mr. Nguyen Minh Nhat, General Director of Van Xuan Group, said that the enterprise has a loan of 2,000 billion VND that has been approved for disbursement by the bank, but until When the project was under construction, the bank stopped lending because it ran out of credit room. This unexpected refusal caused the business to lack capital flow during project development. Mr. Nhat affirmed that the State Bank said that it still lends money to real estate normally, but in reality, real estate enterprises have difficulty accessing capital at commercial banks.

Nhat explained, from 2020 to now, real estate businesses have to overcome the epidemic. Access to capital from foreign investment funds also faces obstacles when the counterparty considers that the legal corridor is not stable due to lengthy project procedures. Currently, there are 4 channels to mobilize capital, which are from customers, stock bonds, investment funds (domestic and foreign) and credit from banks, but so far these sources are entangled. The information that banks tightened credit also contributed to affecting customer psychology, causing the capital mobilized from buyers to be congested.

Van Xuan Group has a loan of VND 2,000 billion that has been approved for disbursement by the bank, but when the project was under construction, the bank stopped lending because the credit room was exhausted.

Similarly, Ms. Vo Thi Hong Mai, Deputy General Director of Asian Holding Company, said that the liquidity of the housing market since the COVID-19 season has been very slow. Businesses have difficulty in offering real estate because customers are concerned about information that banks are tightening credit, making them not dare to pay down money to buy houses because it is difficult to access loans.

According to Ms. Mai, there are customers who buy houses to live in and there are also investment cases, of which the need for loans from banks is about 20-30%. After news that banks tightened real estate credit, the market was even more gloomy. “We hope that the banking industry will remove difficulties and open the credit room for businesses and customers so that the market can recover in the last 6 months of the year,” Ms. Mai said.

Leading a lesson from China after the issuance of a policy to limit real estate credit at the end of 2020, Assoc. Dr. Dinh Trong Thinh, Academy of Financial Analysis, less than 1 year after implementing the credit tightening, the Chinese real estate market began to lack supply, investors did not have money to pay contractors. construction, causing ongoing projects to be delayed.

Entering 2022, April home sales in China decreased by 49% compared to the same period last year; real estate investment decreased by 2.7%; Infrastructure investment decreased by 6.5%, unemployment was up to 6.7%. Not to mention, the sudden shortage of supply while the demand is still there has pushed home prices in China to increase again, the goal of tightening credit to keep house prices down is considered unsuccessful. The Chinese government had to change policies, encouraging some localities to reopen for credit in the real estate sector, depending on the project situation. Thanks to the moves to loosen and clear capital flows, real estate transactions in China in May have gradually warmed up.

“If the real estate credit squeeze continues to be tightened, the market will have some negative effects, greatly affecting growth. When banks stop lending, a series of projects stop, this not only affects the the supply of products to the market but also affects social employment and growth, meanwhile, people who have the need to buy a house but do not have the financial capacity to pay a lump sum cannot access it. With loans, home buying and selling will slow down,” said Mr. Thinh.

Do not tighten credit with real estate

Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), confirmed that many real estate businesses are falling into a state of “thirst” for capital because they cannot access bank loans. In the past two months, since the State Bank of Vietnam issued an official letter requesting credit control in risky areas, including real estate, it is very difficult to get loans for individuals and businesses in this field. . Many banks returned loan applications with the reason that they ran out of credit quotas, while others announced restrictions on disbursement for the real estate sector.

The real estate market is congested due to lack of cash flow.

HoREA Chairman analyzed that real estate businesses develop projects based on capital sources such as equity, credit loans, bond issuance, capital mobilized from customers and FDI capital. In which, equity according to the provisions of the Land Law is very low, accounting for only 15-20%. The remaining 80-85% must be mobilized from other channels. Not to mention, since Decree 20 from the State Bank of Vietnam, real estate businesses are not allowed to borrow money to buy land at commercial banks, only loans to implement projects when they have land. Difficulty accessing credit sources greatly affects the operation of real estate businesses.

Mr. Tran Phuong, Deputy General Director of BIDV also affirmed that there is no restriction but depends on the actual needs of homebuyers, not loans to collect investment land. For the projects of the investor, BIDV pays attention to the financial capacity of customers, how to own capital, how to mobilize, then takes into account loans, issues of bonds, other types of securities. , share. “Projects that investors have experience, feasibility, suitable location and good sales ability will be loaned. Businesses also have to take care of rice and fish sauce, avoid spreading investment,” said Mr. Phuong.

Deputy Governor of the State Bank Dao Minh Tu affirmed that there is no such thing as this agency directing to tighten real estate credit. The State Bank only controls risks for real estate lending credit institutions that show signs of speculation, price manipulation or price manipulation. With effective and feasible projects, with proven implementation plans, businesses are not limited to lending. The right to decide whether to lend or not rests with commercial banks.

Duy Quang