Despite of advantages from governmental Resolution No. 02, real estate (RE) market is still gloomy and unable to defrost. According to authorities’ opinions, there are many weak but venturesome RE companies that cannot meet bank’s requirements.
Desire of escaping from real estate market
According to Ms. Do Thi Loan, Permanent
Vice President of HCM City Real Estate Association, after a survey of 40 RE
companies, there are many companies in difficulties with unfinished projects
and enormous outstanding debts. Their wish is breaking out of RE market, but
they cannot, because of inventories, unpayable debts. As RE market was hot,
land in An Phu commune, District 2, HCM
City was priced at USD
5tsd per square meter, then started to fall to USD 3tsd and now is USD 2tsd per
square meter. 
Meanwhile, it’s difficult for companies to access to borrowed funds of banks. Consequently, companies hope that State bank would have positive policies, for instance, to uncompleted projects, transferring of these projects should be allowed with opened procedures on the basis of Decree No. 153 amendment.
Ms. Loan also referred to “under-desk” lending interest rate (informal lending rate), which businesses have to incur aside from the high on-desk lending rate. Mr. Nguyen Viet Manh Head of Credit Department – State Bank of Vietnam said: “Bad thing is usually exposed, for example, “under-desk” lending rate, which is a violation of laws and business ethics. The State Bank of Vietnam always prohibits all kinds of “under-desk” lending rate. In the period of hot RE market, everybody was satisfied with profits from RE projects, thus no matter how high lending rate was, they accepted happily. But you should not blame banks for present difficulties. The Bank has just set some solutions forth like extension, deferral of debts for enterprises to solve problems and to lend money with lower rate at 15%. At the present, almost all commercial banks have lending rate under 15%”.
RE cannot be exported yet
According to Ms. Loan, there is still no hope for us to export RE. The first determinant of RE exporting is laws. A Vietnamese can purchase 3 to 4 flats in Singapore with decades-long loans and stable lending rate. Conversely, a foreigner cannot buy real estates or have to satisfy all rules of the State to buy. Hence, RE in Vietnam cannot be exported until we open our policies. Many RE companies have proposed changes to RE purchasing rules for overseas Vietnamese, but it is still unfeasible. In term of acquisition and merging, although they can also be a solution for RE, ratio of successful trading is low with only 1 to 2 successful projects per hundreds of negotiation.
To solve the problems, while the governmental Resolution No.2 has been not deployed, the State Bank should quickly conduct the supple package of VND 20 to 40 tsd bln for RE market, especially social housing. Besides that, RE Association also suggested that banks could consider former loans of businesses, and discuss together to solve problems in term of supply package plus reasonable lending rate in order to address inventories and bad debts.
Reported by Trung Dong – Translated by Ngoc Huynh
