The real estate market in the first 9 months of 2022 continued to face difficulties when the volume of transactions did not improve, supply was scarce, prices were at a high level, and mobilizing capital sources faced many obstacles.
According to many experts, if there is no timely solution, this will lead to many risks and challenges to the economy.
Prof. Dr. Pham Hong Chuong, Rector of the National Economics University, said that besides the positive aspects such as the economic outlook changed after the pandemic, and the National Assembly passed basic laws related to the market that help remove the legal bottlenecks, the market will still face many difficulties in 2023.
The first is the difficulty of solving the legality of projects. According to Mr. Chuong, the legal problem is the biggest one, accounting for 70% of the difficulties of real estate and housing projects in the process of preparing for investment, construction and business. The administrative procedures are complicated, lacking in synchronization and connection, which prolongs the time to carry out procedures for real estate and commercial housing projects.
In addition, the legal regulations and procedures related to land and real estate projects have not been resolved because there is no synchronization and consistency between specialized laws related to the market.
At the 5th Vietnam Economic Forum held with the theme "Vietnam's economy 2023: Stabilizing the macro-economy, ensuring major balances, firmly overcoming challenges”, Mr. Chuong pointed out great difficulties. The second challenge of the real estate market in 2023 is the challenge of attracting capital.
Accordingly, the increasing bank interest rate makes the cost of capital increase. The number of real estate corporate bonds in 2023 - 2024 will mature in large volume, which is a big barrier for real estate investment and development activities.
Credit capital in the market is out of phase (from previous years), as a result, credit capital is currently limited. The state's strict control of credit capital for the real estate sector has made it extremely difficult for businesses. Some businesses are at risk of being broken or being acquired by foreign enterprises because they have to sell projects at low cost for cash flow.
Along with that, the bond market is strictly controlled, making it difficult for businesses to raise capital from the bond channel (due to the impact of Decree 65/2022/ND-CP). Many businesses have recently issued a large amount of bonds worth hundreds of thousands of billion dong and have debt repayment deadlines at the end of 2022 and 2023.
This is a great pressure for many real estate businesses in the coming time. Some businesses are also under pressure to repay bonds early to investors for many reasons, including changes in corporate bond issuance control policies.
On the other hand, the decline of the stock market has also greatly affected capital into the real estate market.
The third difficulty of real estate is the market challenge. Mr. Chuong said that the real estate market will continue to be quiet due to the fact that investors tend to wait for the Government's actions. Real estate prices are still at a high level although transactions in the market have slowed down.
The land fever in 2020 and 2021 has pushed prices too high, leaving the market with little room to increase prices, making it difficult to attract investors. This also makes many people who really want to buy a house unable to access, Mr. Chuong said.
From the above challenges, according to Mr. Chuong, state agencies should soon remove difficulties for the real estate market. First of all, there are solutions to adjust supply such as reviewing and handling ongoing urban development and housing development projects, reviewing legal procedures so that projects can be deployed soon, especially large projects.
Along with that is credit solutions for the real estate market. Mr. Chuong said that it is necessary to continue to expand the credit room for the real estate sector at a reasonable level, in line with the financial capacity of credit institutions and the SBV’s monetary and credit management solutions.
In particular, priority is given to lending to real estate projects that are about to be completed, social housing development projects for low-income workers in industrial zones and other policy beneficiaries with appropriate interest rate.
Regarding the bond market, the Government needs to strengthen direction and guidance on the offering and trading of bonds in the domestic market and the offering of bonds to the international market in accordance with the Decree No. 65.
Through the process of managing monetary policy, practice has shown that bank credit is only one of the capital channels, unable to meet all the capital needs of the economy in general and the real estate market in particular. Therefore, the Government needs to create favorable conditions for the development of other channels such as securities, bonds, public investment, attracting foreign investment capital, creating a long-term capital mobilization channel for the real estate market.
As for long-term solutions, this expert said that the Government needs to strengthen management and control to ensure that the market develops a balance between supply and demand, perfect the control policy against real estate speculation. At the same time, it is necessary to improve the publicity and transparency of the market, and perfect the market information and forecasting system.
In order to limit speculation, the experience of many countries shows that it is necessary to implement many solutions synchronously, including using tax policy tools to regulate income from the use and transfer of real estate into the State budget and indirectly regulate speculative behavior.
Compiled by VietnamCredit