Supervising capital mobilization in property sector a priority: minister

There has been speculation and manipulation in the market, prompting the need for authorities to control the capital mobilization of property companies, he told the National Assembly.

“We need to monitor the issuance, investment and service provision of corporate bonds, especially private issuances of property companies or credit organizations related to the industry.”

Authorities need to pay attention to companies with large bond issuances at high coupon rates even though they are making losses and have no guarantees, Nghi said.

Bond issuance is a major channel for raising capital among property developers, with the other channels being bank loans and advanced buyer payments. Property developers contribute only 15-30% of capital needed for each project, and they do not have mid- and long-term funding to help the market develop with stability, he said.

“Property prices, especially for houses, apartments and land, have been surging more than income growth,” Nghi said, adding that this brought difficulties for low-income residents in urban areas and industrial parks to access housing.

This group, however, should be prioritized, and credit organizations need to provide loans toward social housing and affordable housing projects.

The property sector contributes about 11% of annual GDP. Last year, the sector attracted $2.6 billion of foreign direct investment, or 8.6% of the total.

Outstanding loans in the sector hit VND777,235 trillion ($31.27 billion) by the end of August, down 0.94% from two months earlier.