Many 'leverages' will help the real estate market 'warm up'

Dr. Nguyen Van Dinh - Vice President of Vietnam Real Estate Association, President of Vietnam Real Estate Brokers Association said,real estate marketThe first quarter of 2023 is showing positive signs thanks to the Government's timely support and difficulty removal measures.

Specifically, the establishment of a Working Group to review the current difficulties of enterprises and localities with projects that are facing difficulties; Official Dispatch 1164/CD-TTg of the Government was also issued to urge relevant units to implement Decision 1435/QD-TTg; which mentioned that thereal estate businessneed to research and review goods to suit market needs...

In addition, the Government assigned the State Bank to deploy a preferential credit package of 120,000 billion VND for the development of social housing and workers' housing with loans at interest rates lower than the market.

Experts predict that the real estate market will "warm up" in the third quarter of this year thanks to a series of moves from the Government to ease difficulties. Photo: Hoang Ha

Mr. Dinh assessed that the 120,000 billion VND credit package is a valuable tonic for the market. However, according to him, the Government needs to issue a specific Resolution on this incentive package, including criteria and groups of subjects that can access this capital source.

Restructuring production and business activities to suit the economic reality and business resources, restructuring product lines to easily absorb the market will contribute to ensuring the "health" of the business.

According to experts, the Government's intervention helps remove legal and administrative bottlenecks.credit policy… the real estate market is expected to “warm up” from the third quarter of this year.

Sharing at the recent investment highlight seminar, Dr. Can Van Luc, Chief Economist of BIDV, member of the National Financial and Monetary Policy Advisory Council, proposed two groups of policies, short-term and long-term, to help the real estate market recover and develop more sustainably.

In particular, the group of short-term solutions are policies that focus on solving the hottest problems of the market, including legal and capital. According to experts, if legal problems are solved, hundreds of projects will be cleared, and cash flow will come from there. More importantly, solving legal problems will strengthen market confidence.

Regarding capital for the real estate market, Mr. Luc said that the hottest issue is the bond issue. According to calculations, about 120,000 billion VND of real estate bonds will mature in 2023, and about 110,000 billion VND in 2024. Buying back this amount of bonds is putting a lot of pressure on real estate investors.

Dr. Can Van Luc also assessed that capital flow from M&A (mergers and acquisitions) is very important to the real estate market, many businesses have recommended that the banking system lend to finance the capital shortage in M&A transactions.

“I recommend allowing it, because this is completely feasible and a real need. The enterprise will finance 70%, the remaining 30% will be financed by the bank,” Mr. Luc suggested.

In addition, according to this expert, real estate prices are currently "pushed" higher than people's income. Therefore, in order to come up with more reasonable real estate price adjustment plans, there needs to be synchronous coordination between levels, units, and authorities to meet the demand.

"Vietnam should have a stabilization fund like Singapore so that people can easily have housing," Mr. Luc proposed./.