Focus on resolving legal obstacles for real estate projects
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), evaluates that the Conference on the Implementation of the Monetary Policy for 2024 held on the morning of March 14 by Prime Minister Pham Minh Chinh in a very important position aims to build effective solutions to implement the monetary policy for 2024, focusing on resolving difficulties for production and business, promoting economic growth and stability.
Regarding the real estate sector, Chairman of HoREA proposes that competent state agencies focus on resolving legal obstacles for real estate projects to meet the conditions for accessing credit and this is the most effective “credit-less” solution to promote credit growth in 2024.
HoREA suggests supplementing the target customers as commercial home buyers with affordable prices from 3.5 billion VND/unit (about 35 million VND/m2) to access the 120 trillion VND credit package.
According to Mr. Chau, the comprehensive solution is that the Government and the Standing Committee of the National Assembly are considering the possibility of submitting to the National Assembly to consider the early application of the Land Law 2024, the Housing Law 2023, the Real Estate Business Law 2023 instead of taking effect from January 1, 2025 and especially building a Plan to implement the Resolution of the National Assembly on piloting commercial housing projects through agreements on the rights to use land or having the rights to use land for other lands and pilot separate compensation, assistance, resettlement, and clearance work into an independent project.
“If approved by the National Assembly, it will resolve legal obstacles for real estate projects that are difficult, especially those that are obstructed by some provisions of the law, to create favorable conditions for real estate businesses to access credit and help commercial banks facilitate credit approval,” Mr. Chau said.
In addition, the Association proposes that the Ministries and sectors urgently complete about 25 draft decrees, circulars stipulating detailed regulations and guidelines for the implementation of the Land Law, the Housing Law, the Real Estate Business Law, the Law on Credit Institutions to ensure uniformity and consistency in line with reality similar to the Government’s issuance of Decree 08/2023/ND-CP that has helped the separate corporate bond market overcome difficulties, “land softly”, not collapse, or Decree No. 12/2024/ND-CP which has removed difficulties and obstacles in land valuation work.
Also according to Mr. Chau, the specific solution is to propose that the Working Group of the Prime Minister continue to closely coordinate with the Ministries, sectors, and localities to consider resolving difficulties and obstacles for projects in each area based on classifying each “group of obstacles” for feasibility in applying the same to localities to restart projects that meet the conditions to access credit.
At the same time, the responsibility of real estate businesses is to make efforts to restructure the enterprise, restructure investment, restructure housing products towards the real needs of the market, which are affordable houses, social housing, strive to offer reasonable housing prices and sincerely cooperate with the Working Group of the Prime Minister and competent state agencies to resolve difficulties and obstacles for projects.
Supplement the target customers for the 120 trillion VND credit package
To promote the growth of real estate consumer credit, the Association proposes that the State Bank of Vietnam consider supplementing the target customers as commercial home buyers with affordable prices from 3.5 billion VND/unit (about 35 million VND/m2) to access the 120 trillion VND credit package (currently disbursed is too low, only 646 billion VND), because Resolution No. 01/NQ-CP of the Government and Dispatch No. 18/CD-TTg of the Prime Minister have directed the need to ensure the credit flow is concentrated on the driving forces of the economy (consumption, exports, investment), of which real estate consumer is the main target is home buyers.
In addition, to implement the preferential credit policy for social housing under the provisions of the Housing Law 2023, the Association proposes that the Ministry of Construction coordinate with the State Bank of Vietnam and the competent authorities to consider re-implementing the proposed 110 trillion VND credit package (currently only equal to 30% of the total capital needs to implement the program to develop 1 million social houses in the period of 2021-2030) for home buyers, rent-to-buy social housing with preferential lending interest rate of 4.8-5% per year for a maximum term of 25 years.
It’s unfortunate that the draft Circular amending and supplementing a number of provisions of Circular No. 39/2016/TT-NHNN of the State Bank has not been considered for revision to be more suitable…
