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| The real estate market is facing many difficulties, again. Photo: T.D |
More than 100 projects “covered”
On November 8, in Ho Chi Minh City, Deputy Prime Minister Le Minh Khai and leaders of the Ministry of Construction had a meeting with many real estate businesses to remove difficulties and obstacles for the market.
The report of the Ministry of Construction on difficulties and obstacles of the real estate market shows that the activities of businesses in the real estate sector have gradually recovered compared to 2021. However, in 9 months of 2022, the operation of real estate businesses still faces many obstacles.
Specifically, with the strict control of the credit market, the issuance of bonds and stocks, real estate businesses are facing difficulties in accessing capital to implement projects. Loan interest rates, foreign exchange rates, petrol and oil prices, and construction material prices increased, leading to higher fees for enterprises, and affecting their production and business activities.
Most ominously, many businesses face difficulties in project implementation due to obstacles in the project’s legal and investment procedures, especially the approval of investment policies and land allocation procedures.
Some real estate corporations and enterprises are reducing the scale of investment, production and business (stopping or suspending investment and construction activities of some projects; stopping the implementation of new projects; stopping development. issuing shares to increase capital; stopping IPO).
In Ho Chi Minh City, the leader of the Ho Chi Minh City Real Estate Association (HoREA) said that there are more than 100 real estate projects “covered” due to legal problems, which are in need of competent authorities to remove them.
According to Le Hoang Chau, Chairman of HoREA, real estate projects are currently stuck due to many objective and subjective reasons. Among them, the main reason is due to problems and inadequacies of a number of provisions of legal documents and sub-law documents that are not uniform, not connected, and not close to reality.
In addition, some real estate corporations and businesses are “hungry for capital”, have to borrow capital from society with very high-interest rates, are full of risks, or have to sell off assets, projects or sell real estate products, housing with deep discounts, even up to 40% of the contract price, creating opportunities for customers to buy cheaply, but there is a risk because it is a product formed in the future.
In addition, the sale of projects at bargain prices creates opportunities for foreign investors to “take over”, losing the advantage of domestic enterprises that are “dominating” the market.
Struggling to overcome difficulties
Facing the above situation, recently, representing real estate enterprises, HoREA has sent an official dispatch to the Prime Minister proposing some solutions to remove difficulties for businesses, home buyers and investors for the safe, healthy and sustainable development of the real estate market such as to consider “finally” the projects that are being stopped due to legal problems.
The State Bank creates favorable conditions for businesses and homebuyers to access credit capital to increase liquidity. The Ministry of Finance and the Government shall consider and create conditions for individual investors who are not “professional securities investors” to invest in individual corporate bonds.
However, according to Dr. Can Van Luc, Chief Economist of BIDV, facing challenges in 2022 and is expected to continue to face difficulties in 2023, in addition to supportive policies from the Government, the Ministries and departments of real estate businesses also need to restructure and control cash flow risks, interest rates, and interest rates; actively learn and approach the recovery program. In particular, green recovery, green growth by green real estate is the trend.
In addition, businesses need to actively transform digitally and catch up with new trends; adaptation, change management, risk management are inevitable.
On the other hand, in the context of high bank interest rates, low credit room, and pressure on bond maturity, investors actively built long-term adaptation plans to stimulate market demand.
Specifically, for the project Aqua City – a smart eco-urban area east of Ho Chi Minh City of Novaland Group, the investor has offered attractive incentives such as gifting an interior package of VND 1.5 billion; commitment to re-lease the product with a profit of 18% in the first 3 years after receiving the house or commit to buy back 6-10%/year, special incentives for fast payment schedule up to more than 20%.
Or as investor Hung Thinh has just announced a “huge” discount policy for the Moonlight Avenue project (Thu Duc city). Accordingly, buyers who pay up to 98% ahead of schedule will receive a 40% discount of the apartment value.