Real estate is the sector that most deplores the lack of capital in a context of falling overall demand, banks...
Real estate is the sector that most deplores the lack of capital in a context of falling overall demand, banks are now short of capital. However, how to inject capital into this industry to ensure security is an issue that worries the banks.
Whether the housing market is too hot or too cold, banks are affected. Photo: Duc Thanh
Real estate pending special promotion policy
Last week, the State Bank of Vietnam (SBV) announced a mechanism to reconcile credits from surplus and shortage banks. According to the Economic Sectors Credit Department (SBV), from 23 November 2023, the outstanding balance of the entire system will increase by 8.38% compared to the end of December 2022, reaching 56% of the level allocated by the SBV to credit institutions.
By the end of the year, the remaining room for credit institutions to increase credit growth is very large, by nearly 6.2%, or about 735 trillion VND. However, the sector in which to provide capital is a problem that causes headaches for banks
According to experts, real estate is one of the sectors with the best capacity to absorb capital in the current period. The SBV data shows that from the beginning of the year until today, credit in the real estate sector reached more than 2.7 million VND, up 6.04% compared to the end of 2022, representing 21.46% of the total outstanding debt of the economy.
Mr. Le Hoang Chau, President of the Ho Chi Minh City Real Estate Association (HoREA) said that to promote real estate credit, in addition to eliminating legal problems, it is necessary to have special credit promotion policies for feasible real estate projects, rapid progress in implementation, the creation of a driving force for growth and promotion of the real estate market. HoREA will send a letter to departments and agencies recommending this special policy.
Representatives of banks such as TPBank, Sacombank, Techcombank, VPBank, MBBank also said that the line of credit is not a problem, that interest rates on loans have also dropped considerably, but that disbursement remains very difficult. Claiming that"it is impossible to applaud with one hand," the commercial banks asked the competent authorities to continue to seek and implement more comprehensive solutions, in particular the resolution of legal problems related to real estate projects, implementing solutions to drive consumer demand. to stimulate credit.
Fair treatment of real estate with other industries
According to SBV Vice Governor Dao Minh Tu, the real estate market plays a very important role, if it does not promote market development, it will greatly affect economic growth, employment and all other areas.
"It must be said that banks and real estate are 'in the same boat'. If the real estate market is too hot or too cold, banks will be affected because the credit balances of this sector represent 21.2% of the credit of the whole economy", said Vice Governor Dao Minh Tu
However, from the executive agency’s point of view, SBV executives have also warned that if we look at the period 2009-2011, for the immediate benefit, some banks that have loaned a lot of real estate have had to pay a high price in the medium term when bad loans have increased, the security of the banks themselves has been affected.
“Real estate companies are like companies that do business in many other industries and fields. The real estate sector is facing many difficulties, real estate companies need sharing and support to overcome and overcome the difficulties. But that does not mean that we need to create a specific policy or right for this company, in which no poor and low-income person benefits. It is not reasonable to claim a separate interest in real property.”
-TS. Nguyen Quoc Hung, Secretary General of the Vietnam Banking Association
Meanwhile, with real estate, the current difficulties are not only due to objective reasons, but also to many subjective factors. Specifically, many companies invest money in farmland or areas of land that have not been approved or planned. Currently, the «stagnant» cash in the land does not have enough legal procedures. With such projects, banks inject capital, it is also inefficient, because if houses are built, people do not dare to buy.
In recent years, real estate investment companies have multiplied, some companies are investing in dozens of projects at the same time and must bear the consequences. Banks cannot keep up with this cash flow, let alone ease credit for any sector. In fact, in addition to housing loans, banks must also prioritize capital for many other sectors such as import and export, aquaculture, support industries, green growth, etc.
Via Bao Dau tu