A view of HCM City's downtown. Experts have said the real estate market won’t recover until late 2024.(Photo: VNA)Speaking at a forum last week, Nguyen Quoc Hiep, Chairman of the VietnamAssociation of Construction Contractors, said the market would continue facingprolonged hurdles such as a lack of access to capital, credit tightening, legalbottlenecks and delays in bond payments.
Decree 08 recently issued by the Government aimed at removingdifficulties for the corporate bond market is not effective enough to regaininvestor confidence in the market, he said.
“The decree, which allows issuers to extend bond terms by up totwo years, only helps prevent the market from collapsing but it does notactually protect the rights and benefits of bondholders.”
A huge amount of bonds is going to mature this year and next year,putting great pressure on issuers, mostly property developers, as they now faceliquidity problems and cannot issue new bonds to restructure debt, he noted.
He said it was vital to develop a long-term legal basis forcorporate bond issuance in order to build a sustainable capital market for thereal estate sector.
Do Viet Chien, Vice Chairman of the Vietnam Real EstateAssociation, said property firms must be well prepared as the market wouldcontinue facing obstacles in the coming time.
A recently set up task force aiming to remove difficulties for themarket now faces issues beyond their authority in terms of provisions of laws,he added.
The task force should have more power to resolve the challengesfaced by property firms, he said. "It should also work directly with realestate firms to assist them in addressing their issues."
Once the Law on Land, the Law on Housing, and the Law on RealEstate Business are finalised, hopefully they will provide opportunities forinvestors to come back to the market, he said.
Dr. Nguyen Van Dinh, Vice Chairman of the Vietnam Real EstateAssociation, said the market has faced unprecedented problems in the past fiveyears with a large inventory and a sharp drop in liquidity.
The market has seen a huge imbalance between supply and demandwith an oversupply in the high-end segment but a shortage of affordable housingproducts, he said.
He recommended property developers focus on affordable housing andsocial housing projects in order to address the mismatch between supply anddemand.
It’s vital to have specific regulations to implement the 120trillion VND support package to finance social housing projects and housingprojects for workers, he said.
Bond issuers must develop specific debt repayment plans andactively negotiate with bondholders in order to regain their confidence in themarket, he added.
The Government has already issued four directives to removechallenges 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 effortsthemselves first instead of replying too much on Government support measures./.
VNA
