(CLO) According to the Principal of NEU, commercial banks need to issue appropriate lending criteria for different types of real estate, limiting the concentration of credit too much on high-end residential real estate projects.
Capital is flowing strongly into the real estate market.
Currently, to develop real estate projects, investors have many options to mobilize capital. Among them, some traditional capital flows such as: Credit capital, capital from issuing corporate bonds, foreign investment capital, capital mobilized from investors,...
In the period of 2022 - 2023, two of the main capital mobilization channels of the market, namely credit and corporate bonds, are experiencing "congestion". However, at present, credit capital and corporate bonds "flowing" into real estate are showing a strong upward trend.
Capital is flowing strongly into the real estate market. (Photo: ST)
According to the State Bank's report, by the end of August 2024, outstanding credit increased by 7.15%. The State Bank predicts that credit growth for the whole year of 2024 can reach 15%.
However, by the end of August 2024, the outstanding credit balance for real estate business activities alone reached more than 1.27 million billion VND, an increase of 29.18% over the same period last year. Thus, the credit growth rate of real estate business activities is 4 times higher than the credit growth rate of the entire economy .
Regarding capital from corporate bonds, according to the Bond Market Association's report, as of the information announcement date of August 2, there were 33 private corporate bond issuances worth VND31,387 billion and 1 public issuance worth VND395 billion in July 2024.
As of the information announcement date of August 30, there were 43 private corporate bond issuances worth VND37,995 billion and 2 public issuances worth VND11,000 billion in August 2024.
As of September 30, there were 24 private corporate bond issuances worth VND22,333 billion and 1 public issuance worth VND1,467 billion in September 2024. Enterprises bought back VND11,749 billion of bonds before maturity, up 2% over the same period in 2023.
The report also analyzed that real estate bonds issued increased sharply in the quarter, with the real estate group continuing to rank second at about 19%. In the remainder of 2024, it is estimated that about VND79,858 billion of bonds will mature, of which the majority are real estate bonds at about VND35,137 billion, equivalent to 44%.
Commenting on this issue, the Ministry of Construction said that in the third quarter of 2024, the issuance of bonds by a number of real estate enterprises increased sharply again, showing that this is still an important capital mobilization channel in the economy.
Besides credit capital and corporate bonds, FDI capital "flowing" into the real estate market is also on an increasing trend.
The Ministry of Construction believes that Vietnam is currently an attractive investment destination for foreign direct investors (FDI) thanks to its political context, stable economic development and competitive labor costs.
At the same time, according to market surveys by a number of research organizations, the Ministry of Construction assessed: Some real estate segments with outstanding growth include serviced apartments and industrial real estate and have stable demand thanks to FDI capital flows.
“The main reason is that infrastructure development also plays a huge role in increasing the attractiveness of the serviced apartment segment. Foreign capital flowing into Vietnam has attracted many international experts to work, creating a key customer segment for the serviced apartment market,” the Ministry of Construction stated.
Limit the concentration of credit too much on high-end housing real estate projects
Prof. Dr. Pham Hong Chuong, Rector of the National Economics University (NEU), said that in reality, capital flows into the Vietnamese real estate market mainly come from credit channels, corporate bonds and customer mobilization. Therefore, he believes that the Government needs to implement a number of solutions to mobilize and unblock capital for the market.
According to the NEU Principal, commercial banks need to issue appropriate lending criteria for different types of real estate. (Photo: PS)
Firstly, the Government needs to unblock capital sources from bank credit. According to Prof. Dr. Pham Hong Chuong, commercial banks need to issue appropriate lending criteria for different types of real estate, limiting the concentration of credit too much on high-end residential real estate projects.
Instead, banks focus their credit capital on investing in social housing projects and commercial housing projects that are highly effective, have good consumption, and meet the real needs of the people.
At the same time, credit expansion needs to go hand in hand with credit quality control, strengthening appraisal and supervision of loan use, ensuring proper purposes, and limiting new bad debts arising in the real estate sector.
Second, the NEU President said that Vietnam needs to develop capital flows from real estate bonds.
According to Mr. Chuong, the Ministry of Finance needs to review the financial status (including assets, debts, and cash flow) of corporate bond issuers that are currently facing difficulties in order to support and monitor measures to fulfill debt obligations in the coming time.
With newly registered real estate bonds, management and supervision agencies need to strengthen monitoring and supervision of cases where enterprises and related groups of enterprises issue large volumes of corporate bonds.
Third, attract foreign investment capital, create a long-term capital mobilization channel for the real estate market. Accordingly, Vietnam needs to promote and attract foreign investment capital into the real estate sector, restructure capital sources, and promote M&A (mergers and acquisitions) of real estate projects with the participation of foreign investors.
In addition, Mr. Chuong also said that it is necessary to encourage the development of institutional investors in the market through promoting the development of real estate investment funds to diversify capital mobilization channels for the market, in order to gradually reduce dependence on capital mobilized from credit institutions and the corporate bond market.
Source: https://www.congluan.vn/kien-nghi-han-che-tap-trung-tin-dung-qua-nhieu-vao-cac-du-an-nha-o-cao-cap-post319722.html
Comment (0)