Subjects join hands to solve difficulties for the real estate market

Prime Minister Pham Minh Chinh speaks at the conference. (Photo: Duong Giang/VNA)

On the morning of February 17, Prime Minister Pham Minh Chinh chaired a national online conference on removing obstacles and promoting the safe, healthy and sustainable development of the real estate market.

Deputy Prime Ministers Le Minh Khai and Tran Hong Ha; Minister, Head of the Government Office Tran Van Son; Minister of Construction Nguyen Thanh Nghi co-chaired the conference.

Attending the conference at the Government Headquarters were Ministers, Heads, leaders of central ministries and branches; leaders of National Assembly Committees; representatives of the Vietnam Real Estate Association, real estate businesses, banks, construction businesses, and economic experts.

Attending the conference at 63 localities were Chairmen of People's Committees of provinces and centrally run cities.

Lack of social housing and low-cost housing

The report of the Ministry of Construction at the conference said that in 2022, housing supply is scarce, housing product structure is inclined towards mid-high-end housing segment, housing for low-income people is lacking, the structure of affordable real estate products gradually decreases from 20% (in 2019) to below 5% in 2022, the number of projects implemented is very limited.

Real estate transaction volume in 2022 increased compared to 2021, but still decreased compared to before the COVID-19 pandemic. Selling prices were adjusted to real value.

According to the State Bank of Vietnam, outstanding credit for real estate business activities as of December 31, 2022 is nearly VND 800,000 billion.

According to the Ministry of Finance, as of October 28, 2022, the volume of corporate bond issuance reached VND 328,900 billion, down 25.2% over the same period in 2021 and has been decreasing over the quarters. Of which, real estate enterprises accounted for 28.87% of the total issuance volume.

Governor of the State Bank of Vietnam Nguyen Thi Hong speaks. (Photo: Duong Giang/VNA)

According to preliminary statistics from the Hanoi Stock Exchange, as of December 25, 2022, the outstanding balance of individual corporate bonds is about VND 2 million billion, of which real estate enterprises' is VND 419,000 billion (accounting for 33.6%).

In recent times, the operations of real estate businesses have encountered many difficulties, especially in accessing credit loans, issuing bonds and mobilizing capital from customers, leading to businesses lacking capital and having to delay progress and stop project implementation.

In the spirit of “speaking frankly, speaking truthfully, speaking completely; being objective and honest,” at the conference, delegates assessed the current situation of the real estate market, difficulties and obstacles; proposed solutions for the real estate sector and related sectors to promote the real estate market to continue to develop healthily and sustainably.

Reflecting on the difficulties and obstacles of the real estate market, businesses said that the difficulties are partly due to the fact that the institutions and legal regulations on land, planning, investment, urban housing and construction are not yet synchronous, reasonable, and have not kept up with market developments; the organization and enforcement of laws in localities is still confusing and cumbersome; the development of social housing is still limited, partly due to problems in land allocation; selection of investors in social housing projects; policies on empowering and giving incentives to investors in social housing and workers' housing projects are still lacking; regulations on subjects and conditions for beneficiaries of social housing policies are still tight, causing the number of people accessing social housing to be small...

Real estate businesses have difficulty accessing and borrowing capital from banks and credit institutions, and interest rates are high.

Besides, recently, a lot of inaccurate and unofficial social information has negatively affected the market...

Minister of Finance Ho Duc Phoc speaks. (Photo: Duong Giang/VNA)

In order for the real estate market to develop safely, healthily and sustainably, delegates proposed to remove obstacles in legal regulations and procedures for implementing real estate projects; specify the goal of promoting the development of the real estate market and focusing on developing social housing and workers' housing; remove difficulties in capital sources while creating conditions to promote the development of the real estate market; strengthen information and communication to restore confidence, support the market and operations of real estate businesses...

Experts and leaders of ministries, sectors and localities analyzed that the reason for the sluggish real estate market is partly due to oversupply and lack of demand, especially lack of social housing, the housing segment serving the majority of the population.

Along with that, real estate businesses issue a huge amount of bonds worth hundreds of thousands of billions of VND, causing difficulties and great pressure for many businesses, especially when the State strictly controls the conditions of businesses and investors in issuing corporate bonds.

Delegates proposed restructuring real estate segments, including increasing the proportion of social housing; reducing real estate prices; restructuring, freezing, and swapping debts and corporate bonds; thoroughly handling violations in projects; and not criminalizing purely economic activities.

In addition, experts proposed establishing a Steering Committee to remove difficulties and promote the real estate market; establishing a fund with large enough capital to support the development of social housing...

Join hands and unite to overcome difficulties and promote development

Concluding the conference, Prime Minister Pham Minh Chinh said that the real estate market has recently had an unreasonable segment structure, in which the mid-high-end housing segment is large, but the segment for the poor and low-income people is small; housing real estate prices are high; the policy and market responses of relevant entities are not timely; legal issues regarding the real estate market are still entangled; access to capital for real estate is difficult; planning, adjustment, and project structure are still slow; officials in some places and at some times still avoid it due to fear of responsibility; real estate businesses are not flexible and timely in handling internal problems...

Prime Minister Pham Minh Chinh speaks at the conference. (Photo: Duong Giang/VNA)

According to the Prime Minister, in order to promote the safe, healthy and sustainable development of the real estate market, relevant entities from the State, enterprises, customers and people need to join hands and work together to solve the problem, in the spirit of "what is said must be done; what is committed must be done; what is done must have measurable results;" must solve both immediate and long-term problems, but not change the state suddenly; comply with the market rules according to the law of supply and demand, equal to other markets, especially in terms of price.

The Head of Government requested State management agencies to strengthen State management in the development of the real estate market and the corporate bond market. Accordingly, they will continue to improve institutions, respond to policies promptly, strengthen inspection, supervision, and handle emerging issues.

The financial and banking sectors must unblock capital flows, resolve credit problems, and create conditions for businesses to access capital sources...

Real estate businesses in particular must be proactive in resolving internal problems caused by the businesses themselves; restructuring projects, adjusting segments; adjusting prices; and promoting liquidity.

“Business sometimes makes profit, sometimes faces difficulties, and is not entirely favorable. Therefore, we must know how to accept and adjust, overcome to restore and develop the business and contribute to the overall development,” the Prime Minister noted.

For commercial banks, the Prime Minister requested to reduce costs to save expenses, increase digital transformation, reduce input costs, thereby creating conditions to reduce lending interest rates; and restructure debt groups.

“Only when the economy develops and the real estate market develops can banks develop; in times of difficulty, banks must also take responsibility. The State Bank must manage deposit interest rates, contributing to commercial banks reducing lending interest rates,” the Prime Minister emphasized.

The Prime Minister requested authorities at all levels to drastically reform administrative procedures, especially in reviewing and licensing projects; focus on developing and perfecting planning to have a basis for implementing projects; at the same time, manage planning, adjust planning promptly and appropriately; protect the legitimate rights and interests of customers.

The Prime Minister noted the need to enhance transparent and timely communication so that customers can choose good products; ensure policy communication is timely, objective, honest, true to nature, and close to the actual situation, contributing to the safe, healthy, and sustainable development of the market.

The Prime Minister said that the Government will soon have a Project on developing social housing for low-income people and housing for workers; after this conference, the Government will have a resolution on removing obstacles and promoting the safe, healthy and sustainable development of the real estate market; requiring entities to promptly and effectively implement tasks and solutions according to their functions, tasks and roles.

According to VNA