Many real estate businesses have great total assets and have implemented many measures to deeply reduce selling prices and increase discounts to 45-50%, but it is still difficult to sell goods because there are almost no people. buy. Businesses are short of cash, negative cash flow, serious lack of liquidity, which can lead to death on assets.
In a document sent to the State Bank on the morning of February 8, the Ho Chi Minh City Real Estate Association (HoREA) said that the real estate market is very difficult. 2022 is the “most difficult year” and 2023 is the “decisive and vital” year for real estate businesses.
Cash flow bottleneck
Citing a report from the General Statistics Office, Mr. Le Hoang Chau – HoREA Chairman – told Tien Phong : nearly 1,200 real estate businesses were dissolved in 2022, an increase of 38.7% over the previous year. Meanwhile, Mr. Chau emphasized, this sector is one of the 21 most important level 1 economic sectors of the economy according to Decision 27/2018/QD-TTg.
Therefore, the difficulties of real estate will adversely affect many economic sectors and social security in housing for the disadvantaged.
HoREA Chairman said that many businesses have restructured, restructured investment, changed business plans, postponed investment activities, project construction or stopped IPOs. Units at the same time have to reduce production scale, even want to transfer less projects but cannot find investors.
Many businesses were forced to reduce their workforce, in some places reducing the number of employees by up to 50%, reducing wages by 30-50%, unable to take care of the 13th month salary or bonus for the Lunar New Year. Meanwhile, many people have needs but find it difficult to create housing.
“Many real estate businesses have great total assets and have taken many measures to deeply reduce selling prices and increase discounts to 45-50%, but it is still very difficult to sell goods because there are almost no buyers. . Businesses lack cash, negative cash flow, and serious lack of liquidity, which can lead to death on assets,” Chau said.
According to HoREA, besides the biggest difficulty is the legal problem accounting for 70% of the difficulties of real estate businesses, the next direct difficulty is the maturity of individual corporate bonds. In addition, due credit loans will entail the risk of turning into bad debt or jumping into a worse debt group. HoREA also said that it is currently difficult for homebuyers to get credit.
Therefore, HoREA requested the State Bank to assist in solving the cash flow bottleneck to ensure liquidity. First of all, the need of all real estate businesses is to access credit loans to overcome difficult times.
Through synthesizing opinions of businesses, HoREA said that besides the biggest difficulty is the legal problem accounting for 70%, the issue of mature individual corporate bonds and due credit loans are also at risk. risk of turning into bad debt or jumping into a worse debt group.
HoREA believes that enterprises with bad debts, even if they have feasible projects and secured assets, still cannot access new credit loans if the State Bank does not allow the extension of credit loan conditions.
Loan restructuring
In this document, HoREA proposes to the State Bank to consider issuing a new Circular similar to Circular 14/2021/TT-NHNN allowing real estate businesses to restructure credit loans due within a period of time. 12-24 months, keep the same debt group and get a new credit loan with collateral.
The association also suggested the State Bank to direct credit institutions not to require real estate businesses to have a construction permit to get a loan.
For enterprises with overdue credit loans that have been converted into bad debts of group 2 and group 3 that need to borrow credit for project implementation, HoREA proposes credit institutions to consider settlement in case of bad debts. the project has approved the investment policy and is feasible, has collateral and is assessed by a credit institution as having the ability to fully repay the principal or interest.
In addition, representatives of real estate businesses in Ho Chi Minh City asked the State Bank to consider amending and supplementing Article 1 of Circular No. 08/2020/TT-NHNN to extend the roadmap stipulating that credit institutions are only allowed to maximum use of short-term deposits and savings for medium and long-term loans for an additional 12 months.
HoREA also proposed the State Bank to abolish the provisions of Circular No. 16/2021/TT-NHNN on which credit institutions are not allowed to buy corporate bonds in case corporate bonds are issued for the purpose of the restructuring the debts of the issuing enterprise itself. Mr. Chau believes that this is in line with Decree 65/2022/ND-CP.
Source: Tien Phong