Lending interest rates and savings interest rates have cooled down in recent days. After 4 state-owned commercial banks, nearly 10 other commercial banks have participated in the lending interest rate reduction program following the call of the State Bank of Vietnam (SBV).
However, it can be seen that preferential credit packages will only flow into priority sectors, meaning that in the coming time, the real estate sector will still have to cope with the situation of capital being both expensive and scarce. According to a survey by Lao Dong newspaper reporters, currently the floating interest rate for real estate loans is up to 14-15%/year.
Businesses said that many real estate projects have difficulty accessing loans due to high interest rates and tightened limits, so there is a risk of slow implementation.
The leader of a project development enterprise in Ho Chi Minh City said that the project progress of his company is at risk of stalling when the committed loan is not disbursed on time. The cash flow is interrupted, causing construction to be slow, many sub-zones have to postpone progress, prolonging the completion time of the entire project.
According to this leader, real estate depends heavily on cash flow, so when credit is tightened, construction progress and sales are immediately affected. With a project of about 1,000 billion VND, businesses have to spend 300-400 billion VND for the initial phase, but before they can open for sale, they encounter difficulties in borrowing capital, forcing them to postpone progress.
Not only new projects have difficulty accessing capital, many projects that have been granted credit limits also face difficulties in disbursement, in some cases only receiving 20-30% of capital needs, causing progress to be stalled.
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, said that credit plays a key role in real estate - a sector with high capital demand and strong spillover effects. However, the quarterly limit allocation mechanism, although helping to control short-term capital sources, reduces the flexibility of capital flows for long-term projects.
According to Mr. Chau, credit needs to be managed more flexibly instead of being tightened simultaneously, banks can choose effective projects to lend safely. "Real estate credit does not mean risk if it is controlled by the right subjects and projects," he said.
The Vietnam Real Estate Market Evaluation Research Institute (VARS IRE) also believes that reducing the leverage of real estate businesses and limiting excessive credit concentration in this sector aims to manage risks. However, the effectiveness of these measures depends greatly on the timing, roadmap and implementation method, especially for a market that is significantly dependent on house sales formed in the future.
VARS IRE holds the view that controlling credit in a level manner will cause a loss of sustainable growth motivation for the real estate market - which is in a period of increasing differentiation between projects that meet real needs and suspended projects to mobilize capital from buyers.
VARS IRE proposes to study three groups of projects to orient capital flows:
Group A: Projects with sufficient legal basis, capable of completion, with a large spillover effect and mainly lack capital to continue implementation.
Group B: Projects that are still recoverable but need restructuring, such as supplementing equity, adjusting business plans or restructuring debt obligations.
Group C: Projects that are no longer recoverable, need to be transferred, liquidated or handled according to regulations.
The classification aims to correctly identify the level of risk and orient capital flows, but the decision to lend still falls under the responsibility and authority of each bank.
Real estate credit needs to focus on refinancing projects that meet the conditions and are legally safe to promote market recovery, avoiding consequences for liquidity, confidence, bad debts as well as economic growth," VARS IRE expressed its opinion.
