Leading Vietnamese property developer Novaland on Friday asked the government for a supportive mechanism to help the ailing real estate sector deal with current market woes, including a credit crunch and legal procedures.
Speaking at a national meeting chaired by Prime Minister Pham Minh Chinh to tackle problems in the property market, Novaland chairman Bui Thanh Nhon said the government and the State Bank of Vietnam (SBV) should allow banks to extend the payment periods by 2-3 years for loans they have supplied to real estate developers as a way to help the market and businesses recover.
Novaland also expects the SBV to allow the restructuring of loans provided to property buyers who are supported by developers in terms of payment. Banks should also consider cutting interest rates for individual buyers, Nhon said.
He proposed the government apply the process of radically removing legal obstacles, present for many years as market bottlenecks.
Nhon proposed his corporation’s Aqua City urban area project in the southern province of Dong Nai be selected as a pilot scheme for the Prime Minister's property market working group and province to solve legal problems, expected in one month. The reason is Aqua City is a life-or-death project for Novaland at present.
If problems faced by Aqua City are removed, it would help solve problems at other Novaland projects, which would mean the firm will be able to complete its obligations to customers, contractors, banks, and foreign creditors, he stressed.
Novaland, Vietnam's fourth-biggest listed property developer, is undergoing an overall restructuring process. It is working with foreign shareholders, partners, and experts from companies like EY- Parthenon, Red Capital, and law firm YKVN to work out comprehensive shakeup solutions.
Novaland is one of Vietnam’s biggest issuers of corporate bonds. These bonds used to be the preferred source of capital for many businesses, especially real estate developers. But the tightening of the corporate bond market following the arrests of Tan Hoang Minh and Van Thinh Phat leaders over bond issuance violations, and the promulgation of Decree No. 65 in September 2022 with more stringent requirements on private placement of corporate bonds have made companies hesitant to issue bonds.