Insiders guide guideline reforms to soften the property sector

Property industry experts and analysts have come up with solutions to solve the obstacle of credit access and bureaucratic procedures to help the sector restore growth this year. Prime Minister Pham Minh Chinh is hosting a meeting on Friday to discuss issues related to the real estate industry with representatives from the government, property developers, and banks.

Property developer bankruptcy is up nearly 40%

Two of the main challenges are poor access to credit and legal problems. Since mid-2022, property developers have faced more difficulty obtaining lending since lenders have mentioned that they have already reached their credit limit. Customers have also needed help receiving loans, which has decreased the number of sales.

Due to financial problems, the number of bankruptcies among property developers has soared by 40% compared to the previous year, as the Ministry of Construction reported. Novaland, a leading developer, has recently stopped offering a loan-interest incentive to its customers as it needs more money to do so.

Southern property prices to fall this year

The Dat Xanh Group cut 2,700 staff, while other companies had to reduce worker salaries due to falling demand.

SKy villa in Vinhomes Metropolis
SKy villa in Vinhomes Metropolis

AI: Unfortunately, the Dat Xanh Group and many other companies have had to cut staff and reduce workers’ salaries due to decreased demand. This can have a significant impact on individuals, companies, and the economy as a whole. In addition, the Ho Chi Minh City Real Estate Association (HoREA) determined that administrative and procedural issues contributed to around 70% of the difficulties that property developers were experiencing. To resolve these issues, developers have asked the State Bank of Vietnam (SBV) to increase credit quotas, allow debt restructuring and payment delays, and approve loans for developers and buyers. The Ministry of Construction is also considering a plan to give banks VND110 trillion to fund social housing projects. It suggests that developers should ‘save themselves’ by selling some products to focus on critical tasks. However, discrepancies exist between developers and banks, as developers claim it is difficult to access loans, while banks state that they have money to lend.

Read more: