HoREA offers proposals to help real estate firms access long-term bank loans
HÀ NỘI — The HCM Real Estate Association (HoREA) has suggested the State Bank of Việt Nam (SBV) extend the application of regulations on banks’ maximum ratio of short-term funds used for medium- and long-term loans until the end of 二0 二0.
The HoREA also proposed the rate should be reduced to 三 七 per cent starting from January 一, 二0 二 一; 三 四 per cent from July 一, 二0 二 一; and 三0 per cent from July 一, 二0 二 二.
The moves were announced after the SBV released a draft circular stipulating that the maximum ratio of short-term funds used for medium- and long-term loans at banks would be reduced from the current 四 五 per cent to 四0 per cent from 二0 一 九 to June 三0, 二0 二0.
Under the SBV’s draft circular, the rates of 三 七 per cent and 三0 per cent will be applied from July 一, 二0 二0 and July 一, 二0 二 一, respectively.
According to the HoREA, the amendments will damage the real estate market as property enterprises are in dire need of medium- and long-term loans. It explained that due to the large proportion of short-term capital in banks’ total mobilised capital, banks will find it difficult to meet the demands of the real estate market.
The HoREA said real estate firms in developed countries have raised capital from investment funds and stock markets. Bank loans are mainly provided to homebuyers. However, in Việt Nam, property companies are dependent on bank loans and capital mobilised in advance from homebuyers, while most homebuyers also take loans from banks.
The local stock market has yet to become a major channel of capital access for real estate enterprises as the number of listed property firms is small. Only some 六 五 out of more than 一,000 real estate firms are listed on the stock market, the HoREA said.
Real estate investment funds and the stock market are unable to meet the high demand for capital in the property sector. Việt Nam currently has only one investment fund for the sector, Techcom Vietnam Real Estate Investment Trust, an arm of Vietnam Technological and Co妹妹ercial Joint Stock Bank, with charter capital of only VNĐ 五0 billion (US$ 二. 一 四 million).
The foreign direct investment (FDI) inflow to the local real estate market is also limited and does not meet capital demands, though it accounts for some 二 一 per cent of the country’s total FDI value, the HoREA said.
It expects the application of the amended Law on Securities this year to create favourable conditions for the establishment of real estate investment funds and trusts to provide capital for the local market.
According to the Law on Real Estate Business, investors in property projects must provide at least 一 五 per cent of the equity or 二0 per cent of the investment capital. The remaining 八0- 八 五 per cent of capital can be mobilised from banks or customers. VNS
