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Wednesday, July 24, 2024

HoREA urges capital injection into housing market to fuel economic growth

The Saigon Times

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HCMC – The HCMC Real Estate Association (HoREA) has called for the immediate allocation of funds to the real estate sector to drive economic growth.

In a letter addressed to the prime minister and the State Bank of Vietnam (SBV) on July 17, HoREA highlighted the persistent challenges faced by the real estate sector. It emphasized that weak demand has led to a lack of cash flow, declining liquidity, and even insolvency for real estate businesses.

Real estate enterprises have been encountering difficulties in accessing alternative sources of funding, such as the corporate bond market and pre-order financing. As a result, bank loans have become vital for their survival.

However, consumer mortgage loans declined in the first half of 2023 in comparison to the same period last year. This decline indicates that homebuyers and real estate investors were facing obstacles in obtaining real estate loans or reducing their borrowing demand due to market uncertainties.

To address these challenges, HoREA stressed the importance of introducing credit support mechanisms to stimulate demand and enhance market activity in the real estate sector. By improving the accessibility of credit, there can be an increase in demand and a revitalization of the real estate market.

However, industry experts have raised concerns about the upcoming implementation of the SBV’s Circular 06, scheduled to take effect on September 1. They believe that certain provisions within the circular may make it harder to borrow from banks.

In its letter, HoREA expressed concerns about the practicality and alignment of certain regulations in the circular with the current realities of the industry.

The association emphasized the need for consistency and unity with existing legal frameworks to ensure the effective implementation of the circular’s provisions. HoREA believes that some aspects of the circular may not adequately address the needs and challenges faced by real estate enterprises, potentially hindering their access to credit from banks.

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