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Real estate has experienced a long and turbulent year: Reduced purchasing power, few transactions, lack of cash flow, imbalance of supply and demand… In 2023, the real estate market was forced to restructure to recover. recover and overcome the “storm”.
Congested capital flow
After the events related to corporate bonds (DN), investor confidence plummeted, real estate enterprises (real estate) were almost unable to issue new bonds. Not to mention, investors also massively sold bonds, making the cash flow in this market congested.
Meanwhile, the credit channel is also increasingly difficult when banks run out of room. In the real estate sector, banks have had to limit lending to meet capital adequacy ratios.
The real estate market of 2022 is quite bleak. This situation continues to be extended into the first months of 2023. That is the common view of real estate experts.
According to Lawyer Nguyen Thanh Ha – Chairman of SBLaw Law Firm, the difficult situation of real estate enterprises will continue in 2023 when both access to credit and capital mobilization channels through bonds cannot be opened. “The current situation of external loans with interest rates of 20-30% of many investors shows how difficult they are. In addition to having difficulty in mobilizing capital, many businesses also have to continue to pay bond debt. This is a fateful turn for real estate businesses,” said lawyer Ha.
Meanwhile, recorded in the market recently, many real estate segments such as land plots, townhouses and villas have continuously had to lower prices because investors are under financial pressure. In particular, land is the product that recorded the largest decrease in price compared to the peak of the “land fever”.
In Hanoi, the suburban areas such as Thach That, Son Tay, Soc Son … transactions fell into a quiet atmosphere, when the price of land plots simultaneously decreased by 20-30%, even up to 40% compared to the previous period. the beginning of 2022.
A survey by PV showed that, if the price of land plots in Binh Yen commune (Thach That, Hanoi) earlier this year was at VND 22 million/m2, at the present time, many people are selling to cut losses. , reducing the price to only about 15-16 million VND/m2.
Sharing the same “fate”, townhouses and villas in the South An Khanh area (Hoai Duc, Hanoi) are also selling at a loss-stopping price around 60-70 million VND/m2. While at the beginning of the year, the adjacent apartments and villas were sold at prices ranging from 90-150 million VND/m2.
“It is necessary to review which projects are for long-term investment and which are not suitable to adjust the portfolio to bring products that are more suitable for consumers. Only then can we sell products, reduce inventory, and earn cash flow” – Mr. Le Huu Nghia, Director of Le Thanh Construction – Trading Co., Ltd.
Businesses must save themselves
According to Lawyer Nguyen Thanh Ha, many real estate businesses that are facing cash flow difficulties want to continue to complete unfinished projects so they can sell and collect money, solving immediate difficulties. Affirming that the responsibility to repay the due bond debt to investors is the issuer’s responsibility, not the State’s responsibility, but businesses also want the State to remove the bottlenecks in the mechanism to help open the cash flow “- the lawyer said.
Facing the difficult situation of the real estate market, many solutions have been put in place. On December 10, 2022, the State Bank of Vietnam decided to expand the credit room in 2022 by 1.5-2% to get about 240,000 billion VND plus about 200,000 billion VND of the remaining 14% credit room, which will has a total credit capital of about VND 440,000 billion to “pump” into the economy.
Especially for 3 consecutive days, the Prime Minister signed 3 Officials to direct the handling of urgent issues of the economy and the real estate market. That is, Dispatch No. 1156/CD-TTg dated 12/12/2022 “on credit capital supply for the economy”; Dispatch No. 1163/CD-TTg dated December 13, 2022 “about corporate bond market”; Dispatch No. 1164/CD-TTg dated December 14, 2022 “on removing difficulties for the real estate market and housing development”.
Along with that, the Ministry of Finance submitted to the Government a plan to delay the application of Decree 65, from January 1, 2023 to January 1, 2024. And yet, this Ministry also proposes to allow enterprises to change the term, swap issued bonds in accordance with the law on bond issuance, up to 2 years compared to the maturity in the issuance plan. bonds announced to investors.
Mr. Le Hoang Chau – Chairman of Ho Chi Minh City Real Estate Association (HoRA) said: The State’s synchronous implementation of the above solutions is not to “rescue” the real estate market and real estate enterprises, but only through support. mechanisms, policies and laws to create conditions for the real estate market to self-regulate and the real estate business community to actively restructure and restructure; along with considering supporting reasonable interest rates for homebuyers to live in, first-time homebuyers… to increase aggregate demand and purchasing power in the market, help real estate businesses overcome difficulties and support the real estate market recovery and growth towards transparency, safety and sustainability.
“The Government’s supportive actions are like a new breeze to help businesses get excited about expectations, spreading confidence to business investors and consumers” – Mr. Chau emphasized.
According to Dr. Su Ngoc Khuong – Senior Director of Savills Vietnam Investment Consulting Division, the Prime Minister issued Decision No. 1435/QD-TTg establishing the Prime Minister’s Working Group on reviewing, urge and guide to remove difficulties and obstacles in the implementation of real estate projects. I hope this new working group will meet the expectations of real estate developers in solving difficulties as well as the backlog of legal issues of projects in the past time.”
Recalling the difficulties of the real estate market, Mr. Le Hoang Chau emphasized that some corporations and real estate enterprises had to implement urgent solutions to “save themselves” to survive, waiting for new business investment opportunities. .
Also saying that the cash flow of enterprises is very difficult, Mr. Le Quoc Binh – General Director of Ho Chi Minh City Technical Infrastructure Investment Joint Stock Company stated that enterprises are actively managing all mobilization channels, even having to sell assets cheaply, lower product prices to recover cash flow…
Overcoming the storm to survive, these are the moves that real estate businesses are trying their best at this time. And according to the recommendation of Dr. Can Van Luc – Chief Economist of BIDV, businesses must restructure their own cash flows, increase access to policies and change products to meet the real needs of the market. Only when meeting the real needs of the market can the bottlenecks be cleared. “It is necessary to restructure the product, aiming at the affordable housing segment which is very lacking in the market in the past time” – Mr. Luc emphasized.
“Despite the difficulties, the prospect of the real estate market is there. The real estate market needs to adjust, limit excessive speculation, use too much financial leverage. Only then will the market have a good foundation for development” – Assoc. Prof. Dr. Tran Dinh Thien.
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