The latest information shows that the State Bank of Vietnam (SBV) will provide a certain amount of money to “tackle bad debts, focusing on real estate-related debts".
Most proposals mention the use of state funds to purchase completed apartment projects to turn them into social housing ones. This is a top priority, said Nguyen Xuan Thanh, director of the Public Policy Program under the Fulbright Economics Teaching Program in Vietnam.
However, this solution only solves the segment of completed apartment projects which, according to statistics, accounts for about 25 percent of the total apartment supply in Ho Chi Minh City.
The next solution is interest rate support for lower-middle income earners.
However, even with low interest loans, many of them would still find themselves unable to repay the loans with current incomes. And if the number of people who can access such preferential bank loans is extended, the banks will not have enough capitals to lend out.
On the other hand, the proposals on continuing lending to unfinished projects or those nearing completion will directly remove difficulties for many realty businesses, but the result is a bigger supply of finished apartments.
Therefore, this proposal must be incorporated with a plan to allow the projects in progress to be flexibly adjusted with regards to their purposes, such as for social services and commercial services.
The cost of real estate products, including 15,000 apartments in Ho Chi Minh City and 1.44 million m2 of housing in Hanoi, will increase continuously with accumulated unpaid interest rates.
Even if the real estate companies accept to reduce prices, the buyer with financial capacity will not be ready to buy as they expect price to fall even further.
So as to avoid wasting resources and revive the market, the State's financial support needs to be channeled into changing those idled property products into leasing ones, before a sale.
Unsold real estate products should also be leased or transferred to other organizations specializing in rental services with better performance and experience in the field. Even being leased at low rates, it is an important cash flow for property firms to cover interest expenses.
SBV will be ready to provide VND20-40 trillion ($960 million -1.92 billion) credit package for commercial banks to lend to home buyers in the next 10 years with low interest rates of 7-8 percent per year, according to VnEconomy, citing governor Nguyen Van Binh as saying.
Binh said that in 2013, commercial banks will focus on dealing with about VND100-150 trillion worth of property loans.
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