The disbursement rate for real estate projects remains very slow despite the loosened lending conditions. The outstanding loans in the real estate sector have reportedly reached VND 115.5 trillion, amounting to 9.15% of total outstanding loans. The ceiling lending interest rate has been lowered step by step in accordance with the basic interest rate decrease, now hovering around 12.75% per annum. In fact, the actual lending interest rates are even lower than the ceiling levels, since banks now have capital in excess due to the slow disbursement rate. Though banks have loosened the conditions for real estate credit, capital still cannot reach to real estate projects, for many reasons. Bui Tan Tai, Deputy General Director of Asia Commercial Bank (ACB), said that only a half of the VND 2 trillion reserved for real estate credit has been disbursed since September 2008. Meanwhile, Tai said that the loaning conditions have been loosened, especially in funding the house purchases by … [Read more...] about Low-cost capital still cannot reach to real estate sector
Real estate sectors
Money not going to real estate sector
VietRees, a real estate consultancy and management service provider, does not think that the real estate prices will increase in 2009, while reporting further decreases in real estate prices in December 2008 in HCM City. Explaining this, Vu Quoc Thai, Analysis Director of VietRees, said that overseas remittance (the money sent by Vietnamese overseas to their relatives in Vietnam) has not been poured into the real estate sector like in previous years, but has been used for resuming production or paying debts. Many real estate development firms are seriously lacking cash to maintain their operation, and they seem to be unable to get further loans from banks. Meanwhile, Thai said, some banks have been trying to sell high-grade real estate mortgaged by clients, or have been trying to extend debt payment, so that clients have more time to sell real estate to obtain money for paying debts. The low demand in the national economy, the difficulties in accessing credit and the matured credit … [Read more...] about Money not going to real estate sector
Vietnam real estate sector thirsty for capital
Vietnam's real estate sector is in dire need of capital as the economic slump hits invest-ments and alternative funding sources are unavailable, experts said. Deputy Minister of Construction Bui Pham Khanh said Vietnam needs VND500 trillion (US$27.8 billion) to build 37.5-million square meters of housing, including 500,000 square meters of low-cost housing for seven million residents. Other property projects like office buildings, hotels, resorts and commercial centers also require a large amount of capital, he said. He was speaking at a seminar held Monday in Ho Chi Minh City where officials and experts discussed capital raising for the domestic real estate sector. Phan Huu Thang, head of the Foreign Investment Agency at the Ministry of Planning and Investment, said a large amount of foreign investment had been committed to the development of housing and infrastructure in the country. However, as the foreign inflows into Vietnam were hit by the global recession, the local property … [Read more...] about Vietnam real estate sector thirsty for capital
Vietnam welcomes FDI poured into real estate sector
Hanoi Times - In contrast with experts' opinions, the Foreign Investment Department Director Phan Huu Thang believes that foreign direct investment (FDI) pouring into real estate sector is a good sign for Vietnam economy. Mr. Thang emphasized that there was nothing to worry about the huge amount of FDI poured into real estate sector. Vietnam is still in the modernization process and the real estate supply is in shortage, ha said. The Foreign Investment Department under the Ministry of Planning and Investment said the real estate market attracted US$ 21.4 billion of foreign direct investment (FDI) in the first seven months of this year, accounting for 48% of the total newly-registered capital while the 2007 and 2006 ratios were only around 35% and 22%, respectively.Of the total investment, US$ 13 billion has been poured into building high-end urban areas and buildings for office lease, nearly US$ 8.3 billion into tourism and hotels, and the rest for building infrastructure in export … [Read more...] about Vietnam welcomes FDI poured into real estate sector
Real estate sector grows ripe for mergers, acquisitions
The Hanoitimes - A resource crunch has been creating a favourable opportunity for mergers and acquisitions in the property sector, an industry insider has said. "Vietnam's real estate market is observing an unprecedented period of M&A activity, with both foreign and Vietnamese buyers and sellers active at this time," Neil MacGregor, deputy managing director of real estate services provider Savills Vietnam, said. "While deals have been scarce in recent years, there is now a growing range of opportunities available to investors." The Vietnamese real estate market was critically short of capital and developers were therefore seeking new sources of finance. "Despite the recent clampdown on new lending to real estate, credit growth over the period from 2008 to 2010 has left many developers facing the pressure resulting from high interest rates, slow rates of residential sales and rising construction costs." There were a number of options open to developers requiring capital to … [Read more...] about Real estate sector grows ripe for mergers, acquisitions