Bui Thanh Nhon, chairman of property developer Novaland, on behalf of other businesses in the sector, has proposed that banks allow their payments due be extended for another two or three years.
“The extension will give more time for developers to wait for a market recovery and to acquire necessary permits on their projects,” Nhon said at a meeting Friday, which was called to untangle issues in the property sector.
“A timely extension will prevent 10-20% of the economy’s debt from turning bad,” he said.
Nhon also said that loan interest rates have been rising fast since the end of last year, and that some loans have seen interest rates surging 30%.
He proposed that the government take steps to reduce interest rates. Nhon called on banks to accept a narrower profit margin to help the property sector overcome difficulties.
Novaland in particular is working to complete some administrative procedures to free up VND10 trillion ($419.82 million) out of VND25 trillion in cash which is frozen in banks.
“In the next one to two months, if this problem is resolved, Novaland will have enough capital to resume normal operations,” Nhon said.
Property developers are struggling to raise capital to fund projects as they say there are obstacles in accessing loans from credit organizations.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association (HoREA), said in a report submitted to relevant agencies prior to the meeting that starting from the third quarter last year accessing loans became more difficult for both developers and buyers.
Banks were reaching their credit quota and the restrictions were only lifted by the end of last year, he said.
Although many sectors faced challenges last year, banks managed to record new profit peaks, Chau said.
“We hope that credit organizations can share the burden with property developers,” he added
The chairman of HoREA proposed that the central bank relax its criteria so that property developers can restructure their debts and access new loans for projects that have already been given necessary permits.
Hiep suggested that properties that are yet to be developed can be used as collateral for loans as long as the business plan is sound.
He also called on the credit risk ratio to be individualized to each borrower as it is now 200% for all property developers.
Banks, however, once again affirmed that there are no credit restrictions on properties.
Nguyen Thanh Tung, CEO of Vietcombank, said that by the end of last year the property sector saw its outstanding value on credit rising more than 17% from the end of 2021, accounting for 20% of all loans in the economy.
He said that Vietcombank itself is prioritizing loans for manufacturing and industrial property. It also has incentive interests in other sectors such as tourism, resorts and office property.
For residential property, Vietcombank aims to provide credit to buyers who have a real demand to live in a property and those who have a stable income.
Tung said that the imbalance in the property market, where the high-end segment dominates the affordable segment, is the reason for difficulties in the sector as it encourages speculation.
- Reduce Hair Loss with PURA D’OR Gold Label Shampoo
- Castor Oil Has Made a “Huge” Difference With Hair and Brow Growth
- Excessive hair loss in men: Signs of illness that cannot be subjective
- Dịch Vụ SEO Website ở Los Angeles, CA: đưa trang web doanh nghiệp bạn lên top Google
- Nails Salon Sierra Madre