The HCM City Real Estate Association (HoREA) has asked the State Bank of Vietnam (SBV) to help local firms get easier access to bank loans to overcome huge difficulties posed by low liquidity in the local market.
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Speaking at a meeting held on Wednesday by SBV to seek measures for supporting the local struggling real estate sector, HoREA's chairman Le Hoang Chau said that 2023 would be a decisive year for the sector, as many firms might exit the market if difficult access to credit and negative cash flows persist.
"Last year, liquidity problems forced many enterprises to change their business plans, downsize and delay development projects and even initial public offerings, which could hamper economic recovery," he said. "Nearly 1,200 firms dissolved in 2022, up by 38.70 percent compared to 2021. Many have to lay off half of their employees or cut salaries by 30-50 percent."
Chau said that local firms had sharply slashed prices of their projects but still had difficulties. They faced serious shortage of cash.
According to HoREA, paperwork is the biggest hindrance to the sector, followed by corporate bonds that are falling due.
It proposed the central bank make it easier for homebuyers to gain credit to facilitate the recovery of the sector as discounts of 45-50 percent offered by real estate firms could not be enough to attract homebuyers back.
Earlier at a meeting late last year with Deputy Prime Minister Le Minh Khai and the Ministry of Construction, HoREA also called on the government and the National Assembly Standing Committee to consider subsidising loans given by the four government-owned banks, BIDV, Vietcombank, Vietinbank, and Agribank, to buy or rent social housing.
It urged the government and the State Bank of Vietnam to increase banks’ credit quota by two percent, thus increasing the amount of credit available by VND 200 trillion (USD 8 billion), to bolster the economy during the end of the year.
Chau also called for amendments to the 2013 Law on Land and related laws to foster the market.
