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| Market liquidity dropped sharply and legal congestion pushed inventory to increase. Photo: H.A |
According to the Vietnam Real Estate Brokers Association, besides legal issues, capital is the biggest barrier to the recovery process of the real estate market. In the past 2 years, real estate businesses (real estate) have fallen into a serious capital shortage, market liquidity has dropped sharply, legal congestion has pushed inventory to increase, and many projects and projects have increased. The project was not completed on schedule and fell into unfinished status, causing waste of land resources.
Although the efforts of the Government, ministries and branches to overcome difficulties have achieved some remarkable results, liquidity in the real estate market has changed positively over time. However, the pressure of cash flow is not low for real estate businesses in particular and the real estate market in general.
According to estimates by BIDV – Research Training Institute based on data from the State Bank, State Securities Commission, Ministry of Finance, in 2022, corporate bond capital accounts for only 7.7% of the sector’s capital structure. Real estate, by 2023, will increase to 26%.
If in 2022, when the capital market declines, credit capital accounts for nearly 74%, In 2023, it will decrease to 54%. However, real estate credit balance accounts for over 20% of total outstanding debt to the economy and is still on an increasing trend. Accumulated for the first 11 months of 2023, outstanding credit debt for real estate business activities will increase by about 27% compared to the whole year of 2022. In 2023, real estate businesses will have difficulty accessing credit capital.
In addition, capital mobilization from corporate bonds is slowing down due to many difficulties. In 2023, the total value of corporate bonds issued is recorded at VND 311,240 billion, of which corporate bonds related to the real estate sector is 73,200 billion VND, accounting for 23.5% of the total value, an increase of 40.8% over the year 2022, it is equal to about ⅓ of the total value of real estate corporate bonds issued in 2021.
As for FDI capital, in recent years, this capital source has tended to “flow” strongly into the real estate market, focusing mainly on the industrial real estate segment and a number of real estate projects. The other section has a large area and a beautiful location.
Thus, the main capital channels are facing challenges and are not really stable. “Thirst for money” is the reality that many real estate businesses face.
According to the Real Estate Brokers Association, with the characteristic of thin equity capital, the business activities of real estate enterprises depend largely on loan capital. When mobilizing capital has difficulty, real estate enterprises will encounter difficulties. immediate difficulty. Therefore, finding solutions to unlock capital sources to promote recovery and development of the real estate market is essential.
Removing this bottleneck, state management agencies need to drastically focus on removing legal bottlenecks. Accordingly, it is necessary to issue detailed documents soon guiding the implementation of the Land Law 2025 to remove legal bottlenecks for projects that are stuck and restart, creating a basis for local management agencies to approve. new project.
Paying special attention to the affordable housing segment to promote liquidity, help businesses have revenue to repay debt, balance finances and let cash flow flow based on meeting real market needs.
At the same time, research preferential credit packages specifically for the affordable housing segment, with the main goal of encouraging investors to participate in development and increase purchasing power for this type.
State management agencies also need to research mechanisms to improve information transparency and promote the issuance of corporate bonds again, especially promoting credit rating activities on the basis of controlling the capacity of organizations. ratings to ensure appropriate credit ratings and best reflect the risks of businesses in a certain economic condition.
In addition to familiar financial sources (bank credit and corporate bonds), there needs to be mechanisms and policies to form, develop, and ensure effective operation of capital sources from other financial products such as investment funds. real estate investment (REIT), housing savings fund, real estate securitization…