FDI into industrial parks reached 9.7 billion USD after 6 months

FDI into industrial parks reached 9.7 billion USD after 6 months

According to the report of the Economic Zone Management Department, Ministry of Planning and Investment, it is estimated that in the first 6 months of 2019, industrial parks and economic zones have attracted about 340 projects with direct investment capital will be received foreign investment (FDI) with a newly registered capital of about 8.7 billion USD


Source: Internet


With the above results, up to now, the total number of FDI projects invested in Vietnam has reached about 8,900 projects with a total registered capital of about 186 billion USD. For domestic investment projects, in the first 6 months of 2019, industrial parks and economic zones have attracted about 334 projects with a total registered capital of nearly VND 83 trillion. Accumulated total number of domestic investment projects about 9,086 projects with total registered capital of over VND 2,060 trillion.


According to statistics, there are 326 industrial parks established with a total natural land area of approximately 95,500 hectares. Among these, 251 industrial parks were put into operation, occupancy rates reached nearly 74% and 75 industrial parks are in the stage of compensation, site clearance and construction.


In addition, there are 17 coastal economic zones established across the country with a total area of land and water surface of more than 845,000 hectare. Ninh Co economic zone (Nam Dinh province) is in the development plan of economic zones but has not been established.


According to Dieu Trang

Coastal real estate: New sights rich in the potential of investors

Coastal real estate: New sights rich in the potential of investors

The rapid change in planning, transport infrastructure helps coastal cities increasingly attract tourists, opening up opportunities for investors.


Vietnam has great potential of coastal real estate


In a report published at the end of 2018, research unit Knight Frank (UK) reported that the global real estate market is currently about 40% higher than the average product compared to the same size, utility, and quality but lost in sight factor. Although it is considered that the market has a slower pace of development than the urban housing market for about 1 year, what the coastal real estate has shown in recent years has not stopped creating surprises for investors.

Source: Internet


In 2018 it is estimated that more than 7,800 apartments are traded, the absorption rate is over 92%. Only in the first quarter of 2019, the number of open condotels sold in the southern markets was higher than in the north, the southern provinces, especially from Da Nang, with more transactions.


The coastal real estate market has started taking shape since 2015 with many large projects being implemented. In the first phase, enterprises invest mainly in traditional tourist sites with condotel products and built-in villas. However, starting from the beginning of 2018 until now, the process of expanding the coastal real estate market has shown the shifting trend of investment capital. Instead of pouring capital into traditional markets that are showing signs of saturation, many investors have decided to seek land fund in new markets. This journey has created a momentum for economic development for many localities, especially in the South Central region, which possesses abundant natural resources.


New "sights" of investors


Demand for owning coastal real estate in many segments such as private houses, villas, land plots, condotel... in the market is still very big. However, along with the number of projects appearing more and more, competition pressure is also increasing. Therefore, any enterprise seeking a beautiful land fund, taking advantage of its near-sea advantages, complete infrastructure and transportation systems, a formal investment process... will quickly become the "target" of national investors.


The investment story in Nhon Hoi New City - The project located in Nhon Hoi ecological urban area (Quy Nhon) is considered a typical example. There is no need to organize an opening day, but the project has recorded more than 1,000 bookings for product transactions. In the context that the competitiveness between projects in Quy Nhon is not small, what has created the success for this project?


The perspective of Nhon Hoi New City project

Quy Nhon is considered a coastal city with many potentials for tourism property development. The change in the urban face of Quy Nhon is happening quickly after the coastal city has been continuously invested by real estate enterprises to invest in large resort projects. However, to really create attraction for tourists, especially international tourists, only developing services and utilities within the resorts is still not enough. Quy Nhon market is lacking of commercial centers, concentrated streets to meet the shopping needs to keep visitors long-term stay. Wanting to become an outstanding meeting point on the Vietnam tourist map, Quy Nhon needs to form commercial streets, shophouse is planned carefully.

This has been realized by the investor at Nhon Hoi New City project. With more than 1000 products supplied to the market, investors expect this place to form the largest commercial center in the coastal city. Adjacent to the marine park, flexibility is the factor that creates attraction for Nhon Hoi New City products when fully meeting the investment needs to settle, home stay service business or commodity trading. In addition, the project owner also showed careful preparation when fully meeting the legal requirements, granting the red book separately for each land lot. These are the factors that led the project of zoning in Nhon Hoi ecological urban area to become a "new phenomenon" in Quy Nhon real estate market over time.


According to TTDN

Industrial real estate expects opportunities from EVFTA

Industrial real estate expects opportunities from EVFTA

CafeLand - According to experts Savills Vietnam, Vietnam - EU Free Trade Agreement (EVFTA) will provide opportunities for all real estate segments, in which industrial real estate will have many positive effects.


EVFTA is an important agreement, strongly promoting the industrial and export sectors in Vietnam by removing 99% of tariffs on goods. Clusters and industrial parks of Vietnam increasingly attract the attention of investors. EU investors are expressing interest in Vietnam, and transparency of the legal and investment environment will continue to increase the reputation of this S-shaped country.


However, the United States recently applied tariffs on Korean and Taiwanese steel products manufactured in Vietnam. This showed that the origin of import and export goods is increasingly being monitored closely by countries around the world. 


Mr. Troy Griffiths, Deputy General Director of Savills Vietnam, said the agreement is a good news for Vietnam's real estate market, showing the Government's commitment to make Vietnam a leading destination in the field of manufacturing industry in Asia.


Industrial real estate is predicted to have many opportunities after EVFTA.


"Bilateral trade will certainly increase, followed by increased FDI inflows, increased employment, and more opportunities across all real estate segments" said Troy Griffiths.


Mr. John Campbell, Head of Industrial Property, confirmed that the number of requests from EU customers has increased in the process of waiting for the agreement to be signed. He also said that this free trade agreement will increasingly attract the attention of the market to Vietnam's industrial real estate.


Accordingly, by facilitating the application of the latest production technologies and strengthening human resource training, the Government of Vietnam is gradually eliminating the fear of businesses about the feasibility, or lacking of human resources and increased costs. Improving the transparency of the business environment will help reduce investors' worries and raise production quality standards in Vietnam.


Vietnam - EU Free Trade Agreement (EVFTA) is a new generation FTA between Vietnam and 28 EU member countries. EVFTA, together with the Trans-Pacific Partnership Agreement (TPP), are two FTAs with a wide range of commitments and the highest level of commitment of Vietnam ever.


On December 1, 2015, EVFTA officially ended negotiations and by February 1, 2016, the agreement was published. On June 26, 2018, EVFTA was split into two Agreements, one is the Trade Agreement (EVFTA) and the other is the Investment Protection Agreement (EVIPA) and officially ends the legal review process. with EVFTA Agreement.


In August 2018, the legal review process for EVIPA was also completed.


Two agreements were signed on June 30, 2019. After the signing, the two agreements will have to go through the internal approval process in the EU and Vietnam in order to officially take effect with both parties.


According to Tam An

Vietnam industrial real estate attracts European visitors

Vietnam industrial real estate attracts European visitors

The demand for industrial real estate from European investors increased during the period of waiting for the Vietnam - EU Free Trade Agreement to be signed so far.


Savill has just published a quick report on the positive impact of the EU-Vietnam trade agreement on Vietnam's industrial property market. This unit stated that EVFTA is a point, strongly promoting the industrial and export sectors in Vietnam by removing 99% of tariffs on goods. The clusters and industrial parks of Vietnam have been increasingly attracting the attention of international investments, especially investors from Europe.


This unit said that EU investors are expressing deep concern and transparency of the legal and investment environment will continue to increase the attractiveness of the Vietnamese market. John Campbell, Head of Industrial Property, confirmed that the number of requests from EU customers has increased in the process of waiting for the agreement to be signed until it is completed.


This expert said that Vietnam - EU Free Trade Agreement will attract more and more attention of the market to Vietnam's industrial real estate. By facilitating the application of the latest production technologies and strengthening human resource training, the Vietnamese government is gradually eliminating enterprises' concerns about feasibility, or lack of human resources, force and increase costs. Improving the transparency of the business environment will help reduce investors' worries and raise production quality standards in Vietnam.


Mr. Troy Griffiths, Deputy General Director of Savills Vietnam evaluated, EVFTA showed the government's commitment to making Vietnam a leading destination in manufacturing industry in Asia. Bilateral trade activities will certainly increase in the coming time, leading to an increase in FDI inflows, an increase in the number of jobs and more opportunities in all segments of industrial real estate.


According to Ha Thanh

Should deposit money to buy land?

Should deposit money to buy land?

Cases of buying a lot of valued land may be at risk because of the loose law and the lacking of sanctions on this behavior. HCM City Real Estate Association (HoREA) has just proposed a series of solutions to correct the division situation of illegal sale plots, in particular, emphasizing the risks for customers when making a deposit which is too big to buy land (houses).


Specifically, in Clause 1, Article 328 of the Civil Law mentioned of the act of deposit for the purpose to ensure the conclusion or performance of contracts before signing the contract. However, the Business Law Real estate without regulations on "deposit" is a notable point because this is a big hole.


HoREA said, taking advantage of this loophole of the law, the oligarchs sell illegal land in the future, using methods such as: placeholder deposit agreement; capital contribution agreement; investment cooperation agreement... with a large deposit value would cause risks for customers. While the Law on Real Estate Business stipulated that after signing the contract, the investor of a future real estate business project may only receive the first payment of the customer not exceeding 30% of the contract value.


The act of deposit also has inadequacies in the Civil Code. Article 117 of the Civil Code stipulated the effective conditions of a civil transaction to be completely voluntary; not violating the prohibition of the law, not contrary to social morality. The basis of sanctions for deposit acts is almost nonexistent because the parties must comply with the form of a civil transaction as a condition of the effect of a civil transaction in case the law stipulates it.


A land plot project in Ho Chi Minh City. Photo: Dothi.net


Clause 1 of Article 328 of the Civil Code stipulated "Deposit is the deposit party send to the receiving party a deposit or precious metal, precious stones or other valuable objects for a period of time to ensure the conclusion of the contract or contract performance".


The Association recommended that the act of deposit when buying real estate should be regulated, even stating the sanctions in new specialized laws to ensure safety for buyers. For example, deposit just to ensure a future real estate sale and purchase contract (including land) must be complied with must comply with the Civil Code and must comply with the regulations. of the new tight Real Estate Business Law.


In addition, the Civil Code does not prescribe the rate or limit of the value of the deposit on the value of the contract (or the contract expected to conclude), but by the parties themselves. Taking advantage of the inconsistency of the legal system in this case, the investors sell illegal land in the future illegally, have agreed to deposit with customers and receive great value of deposits, which causes damage to customers.


The receipt of deposits with great value is also inconsistent with the provisions of the Law on Real Estate Business. Therefore, the Law on Real Estate Business requires that investors of real estate projects to be formed in the future only receive the first time not exceeding 30% of the contract value. But in fact, there are many cases of selling land (houses) collect deposits exceeding this rate. If the project occurs, customers can be buried with large capital flows, even fall into a weak position if they want to reclaim money because the law lacks sanctions and regulations on deposit acts are still too loose.


According to Vu Le

Mr. Nguyen Tran Nam: The bank should tighten lending to land plots

Mr. Nguyen Tran Nam: The bank should tighten lending to land plots

Mr. Nguyen Tran Nam, former Deputy Minister of Construction, assessed that at present, the purchasing power of the people is strong but the goods are not available because the licensing procedures have been tightened, and the people have turned to buy land for the last two years.


At the Financial - Credit Contribution with the theme "Promoting the development of real estate investment fund in Vietnam" at the Vietnam Private Economic Forum this morning (May 2), Mr. Can Van Luc, the chief economist of the Director of the BIDV Research & Research Institute, said that this was not a new story because the real estate investment fund had been in good shape since 2012. However, this fund has not been opened yet.


Mr. Nguyen Tran Nam - Former Deputy Minister of Construction, Chairman of Vietnam Real Estate Association


According to Mr. Pham Hong Son - Vice Chairman of the State Securities Commission, the legal basis has been regulated since 2012 but in 2016, the new management agency approved Techcombank's fund with a capital of about 50 billion dong. This fund mainly invests in real estate. Because the money is difficult, investing in projects is relatively difficult.


As a person with many years of managing real estate, Mr. Nguyen Tran Nam - former Deputy Minister of Construction, Chairman of Vietnam Real Estate Association emphasized that the real estate market follows the trend of the economy, signs of decline.


In 2009-2010, the market was feverish but there were no buyers causing the crisis and freezing, leading to a difficult banking industry. In the first quarter of 2019, the absorption rate reached 90%. Credit on real estate has been tightened and dropped sharply. Total outstanding loans to real estate are just over VND 500,000 billion, accounting for a small proportion. Currently, the purchasing power of the people is strong but the goods are not available because the licensing procedures have been tightened, the people have shifted to buying land for the past two years. Therefore, Mr. Nam said that banks should tighten lending to land.


“In the past, credit growth in real estate was higher than the average rate, reaching 18% in 2016, while the general market was only 12%. By 2017, this number was the opposite. Cash flows into real estate fell sharply", Mr. Nam said. According to Mr. Nguyen Tran Nam, the real estate fund that allows investment in unfinished projects is really a motivation for projects. However, real estate fund according to Decree 58, Decree 60, the fund has a mix of real estate investment funds and real estate trust funds.


Besides, Circular 36 is about to amend and issue a 2-year roadmap. Recently, the management has foresight, advance notice and a gradual route. According to Mr. Nam, the fund is the direction of balancing capital flows in general, including the real estate market. Besides revising the legal framework, the regulations have not promoted the formation and operation of the fund.


The constitution on finance - credit at the Private Economic Forum 2019


Representatives of Vietnam Real Estate Association proposed housing savings bank according to the model of Germany and Czech. These organizations brought many benefits to the poor, middle-income people... He also proposed to amend and supplement some contents in Circular 36 in short-term capital for long-term loans, clause 3 Article 8 of Decree 20 due to negative impacts on the development of enterprises.


Mr. Nam said that the reason people do not invest in funds is because it is safer to send banks, in fact many funds have a high level of risk. The state should exempt this fund from tax, so tax on those who are paid dividends according to the model of Thailand, Indonesia...


Regarding tax problems, Mr. Phi Van Tuan - Deputy Director of General Department of Taxation said, when converting real estate into the fund, there is a clear adjustment of tax policy. For organizations as well as individuals, contributing real estate assets to the fund is recorded by enterprises. If included in the fund, businesses need to reevaluate according to the market.


In fact, according to a survey by the Securities and Exchange Commission, Vietnam has only one fund with 50 billion dong but has not yet operated. The question is, what is the problem that makes this fund inactive?


As a fund investment company, Ms. Duong Tran - VinaCapital representative concurred with Mr. Nam's opinion on tax issues. Besides, according to her, the transfer is also a barrier that makes real estate investment fund difficult to develop. With the regulation, investors poured 13-30% capital into real estate fund which took 6 years to transfer. The time allowed to transfer is long, making investors not interested in pouring money into this fund.


VinaCapital representative also suggested that the transfer restriction time should be applied to stimulate investors and the time of about one year is appropriate. Besides, the loan limit also made it difficult to operate the fund because the loan limit of real estate investment fund is 5% of the total net asset value. This was a modest borrowing limit, while equity was up to 15%. She proposed a loan limit of up to 15%.


Agreeing with the representative of VinaCapital, Mr. Pham Hong Son - Vice Chairman of the State Securities Commission also added that real estate companies should have a change in attracting investors. With real estate investment funds, companies are almost explored as the main, have not started working. Techcombank itself has strong resources but only spend 50 billion dong to implement.


Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association (HoREA) suggested that there should be funds to gradually replace real estate, coupled with alternative capital sources, two government decrees of real estate investment fund. Products are not yet clear about the type. It is necessary to have a roadmap to form many investment funds to form one of the capital supply channels in the real estate market.


According to D Thuy

Real estate market in 6/2019: Land for land changes in all 3 regions across the country

Real estate market in 6/2019: Land for land changes in all 3 regions across the country

The real estate market in June 2019 recorded the excitement of the apartment segment in the two markets adjacent to Hanoi and Ho Chi Minh City: Bac Giang and Binh Duong. The land plot segment has noticeable changes in some familiar markets.


Bac Giang and Binh Duong exploded supply of new apartments


If the apartment market in Hanoi and Ho Chi Minh City is quite quiet when continuing with the shortage of new projects and transactions in open projects with no sudden growth compared to the previous months, the apartment market at bordering provinces, capital with strong industrial development recorded excitement.


In the south, the industrial capital of Binh Duong is a hot spot for supply and apartment transactions in June 2019. A series of luxury apartment projects launched such as Charm City, Happy One, C-Sky View...


According to a survey of Batdongsan.com.vn reporter, not only is new supply exciting, in the secondary market, Binh Duong apartment price also set a new price level, 10-30% higher than the end of 2018. The average price is nearly 28-35 million VND/m2, far removed from the average price of the same period last year of 23-26 million VND/m2. Some typical projects such as Phu Dong Premier have a secondary price increase from VND 200-250 million/unit compared to the purchase price by 2018. Bcons Suoi Tien Project is currently reselling at the lowest price - VND 1 billion/unit while the starting price is only VND 800 million.


Binh Duong industrial capital is a hot spot for supply and apartment transactions in June 2019


A number of new projects launched in the first half of 2019 in Binh Duong are on par with high-end apartments in District 9 (HCMC). For example, Habitat offered for VND 29-35 million/m2 (not VAT), Compass One also offers an opening price of VND 30-35 million/m2, Opal Boulevard costs about VND 30 million/m2 (not including VAT).


Bac Giang is also a hot spot of new supply of high-end apartments in the Northern market with remarkable open-sale projects such as Bach Viet, Apec Aqua Park, Areca Garden... Different from Binh Duong which has a history of distribution. Long-term industrial real estate development, high-end apartment market towards high-class officials, expatriates in Bac Giang are in the initial stage, when this new lychee emerges as a attraction Strong FDI inflows recently. High-end apartments in Bac Giang have an average price of VND 15 million/m2.


Background land changes in all 3 regions across the country


The land market continues to record noticeable fluctuations in some familiar hot spots. By 6/2019, according to a survey of Batdongsan.com.vn, residential land in District 9 has increased by 6-7 million/m2 compared to the beginning of the year. Online data of Batdongsan.com.vn also shows that, at the time of January 2019, the average price of residential land (legal enough) in the district 9 area reached 30-33 million/m2. However, since the end of the second quarter, the selling price has changed in the direction of increasing sharply, averaging about 36-40 million VND/m2.


Specifically, the full legal residential land on Nguyen Xien, Phuoc Thien and Nguyen Van Tang lines is traded at VND 47-60 million/m2. The area of Hiep Phuoc ward, Le Van Viet and National Road 50, real transactions fall into the price range from 65-70 million/m2. Particularly in Hanoi Highway, the section from Rach Chiec bridge to Thu Duc crossroads, the transaction mainly falls into the price range of 75-90 million/m2... These prices have increased about 10% -15% compared to the time. the begin of the year.


Online data of Batdongsan.com.vn shows that, at the time of January 2019, the average residential land price in district 9 reached 30-33 million/m2.


In the central region, Bac Van Phong (Van Ninh district) became the focus when Khanh Hoa Provincial People's Committee issued a document to temporarily suspend the conversion of land use purpose, split land, and transfer land use rights in the area. Accordingly, real estate transactions in Van Ninh (Khanh Hoa) were reopened from June 17. Immediately after the document took effect, the market began to circulate information of trading and price of Northern Van Phong land increased sharply. However, according to a survey by Batdongsan.com.vn reporter, most of the transactions solved during this time came from about 900 records that were left in the freezing period. Traders are mainly local people to solve the separation of plots for family members or local households who have demand to buy in real places.


Currently resettlement land in Hai Trieu area is offered for sale from 14-14.5 million VND/m2, Dai Lanh resettlement cost from 7-10 million VND/m2... Many large land lots in Van Ninh, including 1 the part has been up to the residential area, the price offered from 3-4 million VND/m2; Land in Van Hung offers price of 2-3 million VND/m2... The market no longer recognized the massive cash flow with both forest land, garden land, and aquaculture land as before.


The northern market recognized the increase in the price of land in Quang Ninh, the land plots at the junction of Tuan Chau port, the price offered last year was VND 49-50 million/m2, now the transaction price reaches VND 52-53 million/m2. The prime location plots next to Highway 18A, near Bai Chay bus station in Ha Khau ward, prices have increased from VND 25-27 million/m2 to VND 27-30 million/m2. Plots in good location in Gieng Day Ward, prices also increased from VND 21-22 million/m2 to VND 24-26 million/m2. Land in Cao Xanh, Ha Khanh, in locations near the sea, within 1 year also increased by an average of 2 million VND/m2, ranging from 19-21 million VND/m2 to 21-23 million VND/m2.


In Cam Pha area, the price of Quang Hong urban area increased from VND 13-14 million/m2 to VND 15-16 million/m2, land in Cam Binh area, the price increased from VND 15-17 million to VND 17-19 million VND/m2, land facing Ben Gio beach, increased from 12-14 million VND/m2 to 14-15 million VND/m2...

According to Enternews.vn

Expert advice on 4 "golden" principles when investing in condotel

Expert advice on 4 "golden" principles when investing in condotel

Condotel - resort apartment accounts for 81% of the total supply of products in the real estate market, but many investors are still wondering about this type of product. So what are the points to consider when deciding to invest?


Condotel or hotel apartment is the most popular type of resort products in Vietnam today. By 2019, condotel will have accounted for 80% of the second home supply in coastal markets. Around the world, condotel is considered a "lifestyle" product - showing the owner's lifestyle and class. However, in Vietnam, the condotel is being recognized as an investment product.


According to the research of Savills or CBRE, although the demand for this type of product is not low, but the supply of condotel increased sharply (an average increase of 29%/year in the next 3 years by 2020) leading to the competition. The harshness has affected many investors' psychology. In fact, in order to have a right decision when considering the type of condotel, investors should pay attention to the following 4 points:


First - Location is an important factor that determines profitability


Position is considered a "golden" factor for successful real estate valuation and business. For the vacation segment, the position is more decisive. According to the survey, currently available areas have a reputation for attracting tourists such as Da Nang, Nha Trang, Phu Quoc... the projects here will be safe, but not sure to be profitable quickly in the areas that are being distributed. such as Mui Ne - Binh Thuan or Phan Rang - Ninh Thuan.


Second - The legal legality of the project


Legal is a risk factor in real estate business. This is reflected in the project investment certificate, which is a prerequisite for publicity for customers. In addition, the value of the project lies in the customers' ownership and peace of mind about their capital thanks to a transparent legal framework. Under the direction from the government, in the third quarter of this year, a legal framework for condotel will be issued - this is a good sign for investors.


Third - prestige of the operator


According to Mauro Gasparotti, director of Savills Hotels Asia - Pacific, the risk of condotel model is mainly at the operation stage. If the operator is not professional, then profitability will not be as committed. Conversely, if the operator is an international brand such as Wyndham or Best Western, it will certainly be a guarantee for investors' profit in the future.


Fourth - prestige and brand of general contractor


The progress and quality of construction works will confirm the commitment of the investor and the general contractor to do the real work. The number and quality of projects that have been successfully and effectively implemented also contribute to creating an important reputation and brand, for example, projects by Coteccons to be general contractors will surely gain trust. Absolute investor's quality of construction and time schedule.


According to Investment News

Only real estate projects which meet the demand could be eligible for bank loans

Only real estate projects which meet the demand could be eligible for bank loans

Banks only focus on lending for effective investment projects, profitability, and investors with sufficient financial capacity to limit risks.


Below are the straightforward sharing of Mr. Nguyen Quoc Hung - Director of the Department of Credit Industries (State Bank) on the banking industry's view on the issue of "squeezing" real estate loans through new provisions in draft Circular 36 (amended):


- The State Bank has recently been extensively consulted on the Draft Circular to replace Circular 36/2014/TT-NHNN. Notably, there are some opinions that the draft content negatively affects the real estate market. Can you give me your opinion on this comment?


The content of the draft replaces Circular 36 amending a number of regulations related to safety ratios in operations of foreign banks and bank branches. In particular, it was mentioned to reduce the ratio of short-term capital sources for medium and long-term loans. This means, this was the rule that applies to investment loans in all areas of the economy, not just real estate.


Accordingly, the implementation schedule will include 3 periods, time to 2022, the goal of reducing the maximum rate of short-term funds used for medium and long-term loans to 30%. With this roadmap, the State Bank will control liquidity risks, helping the system to be secured to changes in macroeconomic conditions. At the same time, it contributes to creating stability for banking operations, supporting the promotion of sustainable economic development.


The draft circular also provides for risk factors for loans. Accordingly, with a loan to buy real estate from VND 3 billion or more, the risk factor is 150%; outstanding loans from VND 1.5 billion to under VND 3 billion have a risk coefficient of 100%. In particular, with a loan of less than VND 1.5 billion, loans to purchase social housing, buying houses under projects, the Government support program will only be subject to a risk factor of 50%. This move aims to direct capital flows to the real needs of the people, creating opportunities to develop affordable commercial housing segment and social housing (the segment is short of supply). Such a roadmap is very suitable, so it can be seen that the draft circular does not negatively affect the real estate market as mentioned above.


- In the quarter 4/2018, real estate credit grew negatively, is this worrying and negatively affects the supply of real estate market?


Mr. Nguyen Quoc Hung, Director of Department of Credit Industry


The growth of real estate credit (including real estate trading and buying) by the end of 2018 reached 31.76%. Therefore, the policy of the Government, the orientation of the State Bank on real estate credit growth is to strictly control real estate credit, while also directing capital flows into effective and projected projects. social housing projects, cheap commercial houses and real needs of people. The draft to replace Circular 36 also aims at this goal.


Besides, with a project, the structure of normal capital will include equity, borrowed capital, advance capital of borrowers and other capital sources. In fact, the investment capital of real estate enterprises is mainly based on the banking system. Accordingly, banks not only provide direct funding to investors but also sponsor indirectly finance loans to home buyers to pay advances to investors.


Thus, the source of capital for real estate supply also includes capital from the demand side. In other words, credit capital for housing needs is in the credit capital for real estate business. That is, the negative credit growth in quarter 4/2018 does not reflect the lack of capital, reducing the credit capital for real estate business.


In addition, credit for real estate in the first 3 months of this year increased by 3.29% compared to the end of 2018. This is a higher increase than the overall growth of the economy, so it is not satisfactory to assume that the field Real estate sector is suffering from credit tightening.


It can be said that real estate business is a potential risk area but this does not mean that banks will limit lending to this sector. Instead, the bank will only choose to lend to effective investment projects, investors have sufficient capacity and profitability to limit risks. This also means that credit institutions do not lack capital, nor limit lending to real estate but rather selective lending. I repeat, the orientation of the State Bank is still to strictly control credit for the real estate sector but to serve the real needs of people.


- So can you point out why the real estate market in the first months of the year is quite quiet?



The quiet real estate market in the first months of the year has a cause mainly due to phase difference in supply and demand. Artwork: VNA


Operating on the real estate market based on the law of supply and demand, the difference in supply and demand is the first reason for the quiet market. Many developers currently focus on high-end apartments, tourism apartments and resorts, but people only have demand for affordable housing segment, and this segment is lacking in supply.


Another reason is due to the consumption habits of people, the time after the Lunar New Year, the first months of the year people often have less real estate transactions. In addition, according to me, the localities have simultaneously pushed up the inspection, supervision and review of project licensing, approval, and adjustment of planning, especially in some big provinces and cities, which have caused many projects. on schedule as originally planned.


Disputes and complaints in apartment management, the investor's failure to comply with the commitments, handing over the house behind schedule... is also a cause affecting the confidence of home buyers. However, I think that this is also an opportunity for management agencies and real estate enterprises to look back on the weak causes of the market, thereby developing strategies in the long term, improving capacity. finance and restructuring the product portfolio, improving product quality, thereby regaining the reputation and trust of home buyers.


- Recently, the Vietnam Real Estate Association has proposed several times on the provisions of the draft Circular to replace Circular 36. The Association considers that the contents reduce the maximum rate of short-term capital used. Using medium and long-term loans and increasing the risk factor for housing consumption loans is a measure of credit tightening, causing a decline in real estate supply. Do you have any comments on these recommendations?


In fact, the recommendations made by the Association on the roadmap to reduce the maximum rate of short-term funds used for medium and long-term loans are also an option that the State Bank considers. Accordingly, each year, the State Bank will adjust down from 3-4% to reach a maximum rate of 30% from 01/7/2022.


As for the judgment on increasing the risk coefficient from 50% to 150% for life service loans, the principal balance of 3 billion VND or more of the Association is incorrect. By adjusting the risk factor of loans to real estate sector in line with the Government's policy on completing mechanisms, policies and laws related to the real estate market. These are steps to ensure the effective and sustainable development of the real estate market and the operational safety of the banking system.


Moreover, the change in regulations in the draft Circular to replace Circular No. 36 also helps real estate enterprises have the motivation to improve their capacity and reputation to mobilize capital in the capital market both at home and abroad, reducing dependence on credit capital, this is also the current international trend.


- Thank you Sir!


According to Vietnam+