Seriously lacking capital to implement projects as banks refuse to give loans, a lot of real estate firms are on the verge of bankruptcy.
Vu Quoc Thai, Analysis Director of VietRees, a real estate consultancy firm, said that the capital flowing into the real estate market has decreased dramatically and seriously affected real estate business and supply.
According to the State Bank of Vietnam, outstanding loans for the real estate sector has reached VND115,500bil, or 9.15% of total outstanding loans of the whole banking system.
The newly released figure shows that real estate loaning remains within the safety line, which sparked the hope that banks would open their doors more widely to real estate developers. Some commercial banks have announced they will resume real estate loans to find outlets for their profuse capital.
Nevertheless, the hope will not become true as Prime Minister Nguyen Tan Dung has asked the State Bank of Vietnam to supervise commercial banks in their loaning to the real estate sector, a part of the plan to minimise possible bad impacts of the global financial crisis.
As such, businesses should not expect to get loans from banks in the near future. Meanwhile, according to Dr Tran Kim Chung, Deputy Head of the Management Science Division under the Central Institute of Economic Management (CIEM) domestic real estate developers still cannot find alternative capital sources.
VietRees’s latest survey shows that real estate brokerage centres and real estate trading floors in HCM City are all quiet these days. Despite prices falling by 50%, very few successful transactions have been reported.
Le Hoang Chau, Chairman of the HCM City Real Estate Association, said that the real estate market will not recover until the end of 2009. Chau said that the demand for accommodations remains very big; however, this will not help the real estate market recover unless banks provide loans.
Meanwhile, experts have warned that if the real estate market’s liquidity cannot be improved by December 31, 2008, current bank loans will become bad debts. Bankers, as the lenders, have mortgaged assets in hand but will not be able to liquidate all the assets to get back VND115tril.
Dang Hoang Vu, General Director of Thanh Binh Real Estate Joint Stock Corporation, said that at this moment, enterprises have no other choice than cut expenses, manage somehow, and wait.
Vu Quoc Thai, Analysis Director of VietRees, a real estate consultancy firm, said that the capital flowing into the real estate market has decreased dramatically and seriously affected real estate business and supply.
According to the State Bank of Vietnam, outstanding loans for the real estate sector has reached VND115,500bil, or 9.15% of total outstanding loans of the whole banking system.
The newly released figure shows that real estate loaning remains within the safety line, which sparked the hope that banks would open their doors more widely to real estate developers. Some commercial banks have announced they will resume real estate loans to find outlets for their profuse capital.
Nevertheless, the hope will not become true as Prime Minister Nguyen Tan Dung has asked the State Bank of Vietnam to supervise commercial banks in their loaning to the real estate sector, a part of the plan to minimise possible bad impacts of the global financial crisis.
As such, businesses should not expect to get loans from banks in the near future. Meanwhile, according to Dr Tran Kim Chung, Deputy Head of the Management Science Division under the Central Institute of Economic Management (CIEM) domestic real estate developers still cannot find alternative capital sources.
VietRees’s latest survey shows that real estate brokerage centres and real estate trading floors in HCM City are all quiet these days. Despite prices falling by 50%, very few successful transactions have been reported.
Le Hoang Chau, Chairman of the HCM City Real Estate Association, said that the real estate market will not recover until the end of 2009. Chau said that the demand for accommodations remains very big; however, this will not help the real estate market recover unless banks provide loans.
Meanwhile, experts have warned that if the real estate market’s liquidity cannot be improved by December 31, 2008, current bank loans will become bad debts. Bankers, as the lenders, have mortgaged assets in hand but will not be able to liquidate all the assets to get back VND115tril.
Dang Hoang Vu, General Director of Thanh Binh Real Estate Joint Stock Corporation, said that at this moment, enterprises have no other choice than cut expenses, manage somehow, and wait.
Vietnam Net
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