VietNamNet Bridge – Commercial banks have been trying to keep
real estate firms alive, because if the firms go bankrupt, banks would suffer.
This explains why no commercial
bank has requested the court to declare the bankruptcy for any real estate firm
so far, even though banks cannot collect debts from the clients, while firms
have been on the point of death.
Real estate products unsold
A report by the Ministry of
Construction showed that 42,230 houses and apartments in 50 localities have
been left unsold (26,444 apartments, 15,876 houses). The inventories are worth
VND111,963 billion.
The figures do not include the
apartment projects which are still under construction, the projects which have been
half finished due to the lack of capital.
Meanwhile, according to the State
Bank of Vietnam, the outstanding loans provided to the real estate sector had
reached VND207.595 billion by October 31, 2012, of which the bad debts
accounted for 6.5 percent of the real estate outstanding loans.
The State Bank has also pointed
out that the majority of debtors cannot make payment on schedule, because they
cannot sell products in the context of the low market demand.
The National Assembly Deputies
spoke at a recent National Assembly session that commercial banks have the
right to request the court to declare the bankruptcy for real estate firms, so
as to collect debts.
However, despite the big bad
debts, no bank has done this.
Deputy Governor of the State Bank--Dang
Thanh Binh, said that the relation between businesses and banks is the civil
relation, which means that commercial banks will decide whether to request to
declare bankruptcy for real estate firms.
Binh admitted that the percentage
of cases filing for bankruptcy remains low, because of the complicated
procedures. This explains why creditors don’t intend to collect money back by
taking legal proceedings.
He said in many cases, commercial
banks follow another way which they believes more reasonable – nurturing the
debtors.
New land tax collection method
would help stimulate demand?
Nguyen Ngoc Hoa, a member of the
Economics Committee of the National Assembly, has suggested that it would be
better to allow enterprises to pay land use fee in many stages within 50 years.
If so, the production cost would be lower, which would allow to reduce the
house prices, thus helping stimulate the demand.
Most recently, the Ministry of
Construction has requested the National Assembly to allow cutting the VAT tax rate
by 50 percent on the real estate developers who run the housing projects for
the poor.
Recapitalizing VND20-40 trillion
Pouring money to develop housing
projects for the poor has been cited as the main solution for the real estate
market for now.
Minister of Construction--Trinh
Dinh Dung, said only if the real estate products of this kind are priced at
VND500 million only (an apartment has the area of 50 square meters), and if the
bank loans interest rates are just 3-6 percent per annum, these would be
affordable to people.
And in order to do that, Dung
said, the State Bank of Vietnam needs to launch recapitalization package.
A senior official of the central
bank has revealed that the bank would promulgate the decision allowing state
owned banks to lend capital to fund people’s house purchases. The borrowers
need to buy the apartments with the area of less than 70 square meters, and the
sale price of less than VND15 million per square meter.
TBKTVN
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