Real estate market 'poured' more than 1.2 million billion VND

Outstanding credit balance for real estate business activities reached more than 1.2 million billion VND as of May 31, 2024.

According to statistics from the State Bank of Vietnam (SBV), the Ministry of Construction said that as of May 31, 2024, outstanding credit for real estate business activities reached more than 1.2 million billion VND.

Specifically, outstanding credit for urban area construction investment projects and housing development projects reached VND318,799 billion.

Meanwhile, outstanding credit for office leasing projects reached VND44,080 billion; outstanding credit for industrial park and export processing zone construction projects reached VND86,330 billion.

For tourism, ecological and resort projects, outstanding credit balance reached VND49,127 billion.

Restaurant and hotel projects have outstanding credit balance of VND 61,483 billion. For loans for construction and repair of houses for sale and rent, outstanding credit balance reached VND 126,794 billion.

Outstanding credit balance for loans to purchase land use rights reached VND94,402 billion.

For other real estate business investments, this figure reached 424,422 billion VND. The balance of guarantees for future housing is 14,406 billion VND.

According to the Report of the State Bank of Vietnam, in June alone, the second quarter of 2024, credit growth reached 3.6%, higher than the credit growth rate of the first 5 months combined.

The banking sector has fulfilled the target assigned by the Government. However, the main lending sector of credit growth, real estate, has decreased sharply recently, the demand for loans from businesses as well as people has shown signs of slowing down, despite the context of housing prices currently “anchored” at a high level but not many actual transactions.

One of the reasons for this situation is that housing prices are currently at a large gap compared to people’s incomes. This trend continues despite the difficult economic situation and the fact that workers’ incomes are showing no signs of recovery.

The State Bank of Vietnam has been closely monitoring developments and the macroeconomic situation, following the Government’s direction.

Along with that, the State Bank also focuses on building and perfecting institutions and policies; improving effectiveness and efficiency in deployment and implementation; and complying with the direction of the Government and the Prime Minister.

The pressure of bond maturity is still considered a heavy responsibility for businesses. Photo: Internet

The Ministry of Construction also recommended that the State Bank focus on directing major state-owned commercial banks to conduct research, develop and provide credit packages for social housing buyers with loan terms of 10-15 years, preferential interest rates 3-5% lower than normal commercial loans so that low-income people and workers in industrial parks have more opportunities and motivation to buy houses.

Regarding the issuance of bonds in the real estate sector, the Ministry of Construction cited data compiled by VBMA from HNX and SSC showing that since the beginning of the year, there have been 102 private issuances worth VND104,109 billion and 10 public issuances worth VND11,378 billion.

Statistics show that the real estate industry still dominates capital mobilization activities from the bond channel.

Assessment reports from a number of bond market research organizations in the second quarter of 2024 show that real estate bonds have tended to increase issuance again, and businesses have reduced maturity pressure compared to the previous quarter.

Specifically, in April 2024, the issuance value of the real estate industry group dominated capital mobilization activities from the bond channel, accounting for 56% of the total issuance value in the month.

In May 2024, the real estate sector issued bonds including the following enterprises: Vingroup Joint Stock Company (stock code:  VIC ) had 2 final offerings raising an additional 4,000 billion VND; Vinhomes Joint Stock Company also completed the plan after selling an additional 2,000 billion VND bond lot; Hoang Truc My Company Limited sold a bond lot worth 200 billion VND; IDTT Joint Stock Company (formerly Thu Thua IDICO Industrial Park and Urban Development Joint Stock Company – CONAC) raised 200 billion VND;

In June 2024, businesses issued a total of 62 bond lots and collected VND 68,000 billion (doubled compared to the same period in 2023); the construction/real estate industry group mobilized about VND 8,000 billion, accounting for 12%.

Statistics in the second quarter of 2024 show a bright outlook for bond issuance by some real estate businesses, giving more stable expectations for an important capital mobilization channel of the real estate industry.

Despite positive signs, the pressure of maturing bonds is still considered a heavy responsibility for businesses to regain the trust of investors in the corporate bond market in general and real estate corporate bonds in particular, ensuring healthy and stable development in the future.

Source: Người Quan Sát.