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