Want to be in the loop?
subscribe to
our notification
Business News
REAL ESTATE MARKET WON’T RECOVER UNTIL LATE 2024: EXPERTS
Despite the Government efforts to remove challenges facing the real estate market, it won’t prosper until the end of next year, experts warned.
Speaking at a forum last Friday, Nguyễn Quốc Hiệp, chairman of the Việt Nam Association of Construction Contractors, said the market would continue facing prolonged hurdles such as a lack of access to capital, credit tightening, legal bottlenecks and delays in bond payments.
Decree 08 recently issued by the Government aimed at removing difficulties for the corporate bond market is not effective enough to regain investor confidence in the market, he said.
“The decree, which allows issuers to extend bond terms by up to two years, only helps prevent the market from collapsing but it does not actually protect the rights and benefits of bondholders.”
A huge amount of bonds are going to mature this year and next year, putting great pressure on issuers, mostly property developers, as they now face liquidity problems and cannot issue new bonds to restructure debt, he noted.
He said it was vital to develop a long-term legal basis for corporate bond issuance in order to build a sustainable capital market for the real estate sector.
Đỗ Viết Chiến, deputy chairman of the Việt Nam Real Estate Association, said property firms must be well prepared as the market would continue facing obstacles in the coming time.
A recently set up task force aiming to remove difficulties for the market now faces issues beyond their authority in terms of provisions of laws, he added.
The task force should have more power to resolve the challenges faced by property firms, he said. "It should also work directly with real estate firms to assist them in addressing their issues."
Once the Law on Land, the Law on Housing, and the Law on Real Estate Business are finalised, hopefully they will provide opportunities for investors to come back to the market, he said.
Dr. Nguyễn Văn Đính, deputy chairman of the Việt Nam Real Estate Association, said the market has faced unprecedented problems in the past five years with a large inventory and a sharp drop in liquidity.
The market has seen a huge imbalance between supply and demand with an oversupply in the high-end segment but a shortage of affordable housing products, he said.
He recommended property developers focus on affordable housing and social housing projects in order to address the mismatch between supply and demand.
It’s vital to have specific regulations to implement the VNĐ120 trillion support package to finance social housing projects and housing projects for workers, he said.
Bond issuers must develop specific debt repayment plans and actively negotiate with bondholders in order to regain their confidence in the market, he added.
The Government has already issued four directives to remove challenges for the economy, especially the real estate market.
It has also taken measures such as rescheduling and deferring debt, tax, and land rent for real estate businesses.
However, experts have urged property firms to take efforts themselves first instead of replying too much on Government support measures.
Source: VNS
Related News
VIETNAM’S GDP TO GROW 5.5% THIS YEAR – WB
This forecast is based on the assumption of a moderate recovery in manufacturing exports in 2024, fueled by rebound growth of 8.5% year-on-year in the fourth quarter of 2023 and 17.2% year-on-year in the first quarter of 2024, reflecting strengthening global demand, said Dorsati Madani, senior country economist at the WB in Vietnam.
FOUR COMMODITIES POST Q1 EXPORT VALUE OF OVER 5 BILLION USD
The total export turnover of agricultural, forestry, and fisheries products in the first three months of 2024 is estimated to reach 13.53 billion USD, an increase of 21.8% compared to the same period of 2023.
MOIT PROPOSES SCHEME TO BOOST RENEWABLE ENERGY PROCUREMENT
The proposed Direct Power Purchase Agreement (DDPA) mechanism, outlined in the draft decree, targets organisations and individuals consuming electricity from the 22kV power grid or higher, with a monthly consumption averaging 500,000kWh. However, residential households are excluded from direct procurement.
REAL ESTATE BONDS PLACE PRESSURE ON ISSUING FIRMS
The ministry’s recent report underscores concerns within Vietnam’s corporate bond market for 2023 and 2024. It emphasizes the critical need to address hindrances to the real estate sector in line with the objectives provided in Government Resolution No. 33/NQ-CP, which aims to stabilize the industry.
DA NANG CUSTOMS FOCUSES ON DEVELOPING CUSTOMS-BUSINESS PARTNERSHIPS
Da Nang Customs Department issued an action plan for developing customs-business partnership in 2024. One of the new events this year is the workshop on “Settlement reports for enterprises engaged in outsourcing, export production and export processing” held in Da Nang Customs Department on April 16, 2024.
OVERCOMING HURDLES IN SUSTAINABLE INDUSTRIAL AND ECONOMIC ZONE DEVELOPMENT
“The path toward sustainable development for industrial zones (IZs) and economic zones (EZs) continues to encounter significant challenges. A notable concern is the instability and lack of consistency in the institutions and policies governing these zones. This inconsistency has resulted in a void of transformative impetus for socio-economic advancement,” said Dr. Nguyen Quang Tuyen from Hanoi Law University.