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Sunday, February 25, 2024

VND120 trillion worth of real estate bonds to fall due in 2024

The Saigon Times

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HCMC – FiinGroup has forecast that around VND120 trillion worth of real estate bonds will fall due this year, the highest level in five years, exerting significant pressure on property firms.

FiinRatings, a credit rating division of FiinGroup, said in a report that housing developers will continue to face liquidity pressures, difficult access to funding sources, and risks related to interest rates and economic downturn.

“However, large enterprises with strong brand recognition, high project quality, ample land and effective project execution capabilities are poised to access a diverse range of capital sources easily and exhibit stronger resilience,” the VnExpress news site cited a report from FiinRatings.

The recent enactment of key laws such as the amended Land Law, the revised Law on Real Estate Business, and the amended Housing Law will pave the way for market recovery.

The real estate market began encountering challenges from the end of 2022, but it was not until 2023 that it truly fell into the doldrums due to legal bottlenecks, capital shortages, and limited liquidity.

According to the Ministry of Construction, only 52 commercial housing projects with nearly 16,000 units were completed in 2023, less than half of the previous year’s output. Meanwhile, only 17 resort and accommodation office projects were completed in 2023, equivalent to about 56% of 2022.

By the end of the third quarter last year, there were over 324,700 transactions in the entire market, only about 41% of the figure in 2022.

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