Many breakthrough policies are needed to open up capital flows to the real estate sector

DNHN - Experts assert that real estate serves as the economic pillar. Because real estate is a very sizable market that is intricately intertwined with significant market industries.

Real estate companies require additional assistance.

Indeed, real estate is a sector that employs a significant number of unskilled laborers and utilizes raw materials and equipment from numerous other industries. By situating real estate within the broader economy, one can discern that the real estate market possesses the capacity to propagate to more than 40 other significant economic sectors, thereby progressively serving as a conduit and catalyst for progress in these domains. another vocation.

Real estate is a pillar of the economy, and its failure will precipitate the demise of numerous other sectors, including construction, raw materials, and services, among others. It has been demonstrated. When the real estate market is "quiet and standing still," it is abundantly clear that several related industries are "standing still" in the present context.

In addition to establishing conditions for businesses, homebuyers, and investors to obtain credit capital, the government proposed deferring principal and interest payments on loans for challenging real estate enterprises (including projects catering to production and consumption, industry, tourism, and resorts) to eliminate capital sources for the real estate market as a whole.

Sustained credit provision to the real estate industry, with an emphasis on viable projects and loan plans, as well as clients possessing adequate financial means and the capability to timely and completely repay debts.

About this matter, Dr. Nguyen Tri Hieu, an authority on finance and banking, refuted the notion that real estate is an unproductive sector.

Based on his analysis, real estate is a substantial market that is intricately linked to significant sectors within the market. As a result, the government has progressively come to recognize the significance and function of real estate in the contemporary economy. Rapidly issuing a series of new policies to provide businesses with additional time to address internal issues, including the following: policies about administrative procedures; Circulars 02, 03, and 10 of the State Bank establish mechanisms for businesses to reschedule and defer debt obligations; and specifically, the policy permits organizations to extend the bond repayment period until at least 2024.

According to Mr Hieu, real estate is progressively solidifying its position as a fundamental sector of the economy, in conjunction with transportation, banking, insurance, finance, and production. Real estate, including industrial, commercial, and tourism real estate, produces tangible goods with substantial value, not intangible worth.

However, according to Dr. Nguyen Tri Hieu, such policies are insufficient; real estate companies require additional assistance. Numerous real estate companies have declared bankruptcy and withdrawn from the market in 2023, while those that have survived are struggling. Furthermore, the burden of principal and interest debt is deferred from the current year to the following year. A situation in which the company has little to no revenue to compensate is also a significant risk.

He underscored the necessity for the government to implement more robust and innovative policies shortly. We can only then anticipate a "warming" of the real estate market in 2024.

Mr. Hieu confirmed that very few companies have been able to generate revenue and profits through the sale of goods in recent years. The level of operating cash flow remains inadequate for numerous businesses.

"The combination of impaired cash flow and a hindrance in the mobilization of capital will heighten the vulnerability of real estate companies to delayed principal and interest payments." Moreover, a significant proportion of personnel employed in the real estate development and brokerage sector are unemployed due to the inability of investors to sell properties, the market's inventory is substantial, and this constitutes an extremely serious issue, according to this expert.

Investment capital is no longer available to real estate firms.

Dr. Nguyen Tri Hieu stated that real estate companies will have no cash flow to reinvest if they are unable to sell their products. Without cash flow, no bank will be willing to lend capital to a company, and obtaining capital will be extremely difficult.

He further analyzed that, at this time, banks lend primarily based on whether or not a company has sufficient cash flow. As a consequence, unsold inventory and backlogs of revenue have emerged as significant impediments to cash flow from various sources, including investors, banks, and revenue.

"This is an alarming situation for the current real estate market," Mr. Hieu commented.

Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competitiveness Research and a member of the National Financial and Monetary Policy Advisory Council elaborated on this matter by stating, "A chain reaction will result from the decline of real estate." negative in nature. Real estate should not only be supported to "rescue" industry businesses but also the ecosystem that surrounds them. Controlling support must also be considered to guarantee macroeconomic stability, the security of the banking and financial system, and sustainable development as a whole.

Distinguished Mr. Thanh Undoubtedly, real estate plays a significant role in the economy. However, over the course of several decades, it has frequently been misconstrued and has failed to operate under optimal conditions for promotion. intrinsic reserves. Do real estate companies suffer as a result of miscommunication?

Prof. Dr. Hoang Van Cuong, Vice Rector of the National Economics University and Member of the National Assembly Finance and Budget Committee stated, "In the current real estate market, real estate businesses must restructure their investment portfolios in addition to requiring government intervention to handle credit issues, corporate bonds, and legal problems to eliminate the "bottleneck."

As an alternative to low-income housing, banks should regulate lending to purchase real estate in the shadow of residential consumption, to compel businesses to reduce selling prices and attract investors (as stated by Mr. Cuong). Those who have available funds and are anticipating a price increase; banks do not finance speculative real estate transactions.

"Pending projects, upon their successful completion, will possess immediate liquidity and be operational." "Banks should continue to finance capital to complete projects and introduce products to the market while freezing old debts of businesses," he said.

As another point, Mr. Cuong emphasized the importance of managing sales cash flow and disbursed loan capital flow into project completion activities to recover bank-sponsored debts.

Nghe Nhan