VietNamNet Bridge – Doubts have been raised whether if the VND30 trillion package can save
the sinking real estate market. VND30 trillion is believed to be just a “grain
of salt in the ocean.”
The State Bank of Vietnam is considering designing a
VND30 trillion credit package in an effort to rescue the real estate market.
Three months ago, the government released Resolution No. 02, showing its
determination to rescue the market. Experts believe that the fall of the real
estate market would lead to the collapse of many other markets.
However, it’s not sure if the bailout would help warm
up the market which has been frozen over the last few years. VND30 trillion
does not have much significance for real estate developers who are thirsty for
capital. It also does not have much significance for people who want to borrow
money to buy houses, because they will have to satisfy the strict requirements
set by the banks, to be eligible for loans.
Deputy Chair of the National Assembly’s Economics
Committee Mai Xuan Hung said he knows a National Assembly’s Deputy who has
fallen into “dilemma” with their house purchase. The deputy was allowed to buy
a half-finished apartment at a preferential price of hundreds of millions of
dong. He had to borrow money from banks to buy the apartment. And he does not
know what to do now. He doesn’t have money to decorate the apartment, while he
cannot sell the apartment.
“I mean that even when someone needs accommodations,
he would be very hesitant to borrow money to buy houses,” he said.
The suggested VND30 trillion package offered by the
State Bank is technically believed to be a “reasonable offer.” The interest
rate of 6 percent per annum proves to be reasonable to the current state’s
ability and borrowers’ capability, who are mostly office workers, state agency
employees, low income earners.
However, analysts agree with Hung that the credit
package may not reach to those people who really have the demand for
accommodations.
The 6 percent per annum interest rate is expected to
be applied for the first three years of the loans, while the interest rates of
the next years would be changeable in accordance with the market interest
rates. This means that borrowers would have to bear higher interest rates in
the remaining years, which may go beyond their financial capability.
The analysts also said they are not sure about the
demand for the apartments priced at below VND15 million per square meter. The
low priced apartments are mostly located on the belt roads, far from the
central area of the city.
At present, the investors, who develop commercial
apartment projects, can enjoy preferences if they shift to develop the projects
for low income earners. This would help the developers’ products more salable,
and help people more easily access accommodations.
However, as Vu Dinh Anh, a well-known economist,
pointed out, there would be two big risks for banks.
First, the developers don’t use the loans to develop
houses for low income earners as they commit, but will use the money for other
purposes.
Second, the developers respect their promise and build
houses for low income earners, but they cannot sell the products. This would
lead to the increase of the bad debts in the real estate sector.
TBKTVN
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
No comments:
Post a Comment