The State Bank of Viet nam (SBV) has loosened
its grip on real estate loans recently in a long-awaited move that some
industry insiders say may help revive the stagnant market.
The
central bank excluded some types of real estate loans from the list of
"non-production" loans – a credit category that commercial banks have
been specifically ordered to control this year.
As a
result, restrictions have been lifted on loans for home repairs, home
purchases, and home construction but eligible borrowers are limited to wage
earners only. Developers can also apply for bank loans as long as they are
developing housing projects for low-income groups or other residential projects
that can be put into use by January 1, 2013.
Following
the new policy, many banks plan to increase lending to the real estate sector.
However,
many real estate developers do not have enough time to wait for low-cost
capital sources. Many of them say bank loans are still beyond their reach while
their projects struggle to get a move on.
They
also say that their loan applications have been rejected by banks for a myriad
of reasons.
Some
banks have said they have to wait for guidance from the central bank in
offering loans to real estate businesses. Some either refuse to lend, or give
the excuse that they are restructuring their business debts. Some banks require
borrowers to have a stable source of revenue to be eligible for loans.
To
survive, many real estate enterprises are trying out various measures to sell
their products in order to get back the money for paying old bank loans and
continuing incomplete projects.
The
Hoang Anh Gia Lai Group, for instance, has recently announced it is likely to
cut prices of apartments in some projects by 50 per cent. Chairman Doan Nguyen
Duc said that once prices reach reasonable levels, people would certainly buy.
"Low prices play a role in saleability, and can bolster demand in a gloomy
market," he said.
Under
the HAGL group's plan, bout 2,000 apartments of 60 to 90 square metres will be
sold at half their original prices.
Following
this trend, many other real estate developers have drawn up plans to wholesale
their apartments to investors or cut property prices in order to recover
capital and pay back banks debts.
The
Quoc Cuong Gia Lai Joint Stock Company has decided to lower prices of
apartments at its Quoc Cuong Apartment Complex in Binh Chanh District, and is
looking to sell them to the city government for resettlement purposes.
The Hoa
Binh Construction and Real Estate Company is seeking partners to transfer its
29,698sq.m Long Thoi residential project in Nha Be District, and the 10,278sq.m
Thanh Xuan land lot in District 12. These projects will have prices cut by 10
and 20 per cent.
Some
project owners have asked city authorities for permission to divide their apartments
into smaller ones that will be more affordable for home seekers.
Meanwhile,
several real estate developers have chosen to exchange apartments for building
materials. The New Technology Application and Construction Investment
Corporation (TECCO) is negotiating such a deal with three building materials
suppliers.
Analysts
appreciate efforts being taken by developers to sell their products. They say
the key attracting customers is to introduce high-quality products at
reasonable prices.
VNA
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