PM forms special task force to help property developers out of the woods

Prime Minister Pham Minh Chinh formed a special task force Thursday to help real estate projects and developers address the challenges facing them.

The task force is led by Nguyen Thanh Nghi, Minister of Construction with deputies - State Bank Deputy Governor Dao Minh Tu and Deputy Construction Minister Nguyen Van Sinh. It has five other members drawn from relevant ministries and agencies.

The eight-member task force will make reports on market problems to the Prime Minister so that suitable solutions and measures can be introduced within the government leader’s power to help real estate projects deal with their problems and restore their business.

With problems beyond his authority, the group will advise the PM on proposed measures for higher-level decision makers.

The special team will also examine ways to resolve difficulties and problems related to the implementation of real estate projects under the government’s management.

They will propose changes and improvements to relevant mechanisms, policies and laws; and perform other related tasks assigned by the PM.

The team has the right to request ministries, ministerial-level agencies, people's committees, and enterprises to make reports and provide information on real estate projects that are mired in difficulties and obstacles in terms of legal procedures. It will propose solutions after studying the problems in depth.

On November 8, two meetings were held in Hanoi and HCMC, co-chaired respectively by Deputy PM Le Van Thanh and Construction Minister Nghi, and Deputy PM Le Minh Khai and Deputy Construction Minister Sinh to seek ways out for property developers in trouble. Major developers attended the meetings and proposed that the government sets up a special task force to help them get out of the woods.

According to the HCMC Real Estate Association (HoREA), legal problems account for around 70% of all difficulties faced by property developers with inconsistent regulations a major issue. It has said that it would take time to solve existing problems. According to the association, the most radical solution would be to amend the 2013 Land Law and related laws towards removing existing inconsistencies and other bottlenecks.

The Vietnamese real estate market is facing big difficulties with "risks of falling into a recession," HoREA said in a document sent to the Prime Minister on November 7.

"Real estate companies have seen profits plunge or made losses, with big liquidity risks. Some of them are deploying "painful" measures for survival," the document reads.

Several firms must reduce personnel, and a number of developers have had to pause investment or postponed new projects, it notes.

Earlier, in July, Chau had told a forum chaired by PM Pham Minh Chinh that visible “slowdown, stagnation and shrinking liquidity” were worrisome signs of uncertainty in the domestic real estate market.

There are concerns among developers and traders that banking credit to real estate has been narrowed down, while the corporate bond market tightened up following the cancellation of Tan Hoang Minh's nine bond issuances in early April due to its provision of "untrue information".

On October 8, Truong My Lan, chairwoman of HCMC-based property developer Van Thinh Phat Group, was arrested for alleged fraud in the issuance and trading of corporate bonds during the 2018-2019 period.

Hanoi’s Department of Planning and Investment in early November froze assets of 762 legal entities related to the alleged fraud that occurred at Van Thinh Phat. The move aims at preventing any transfers, donating or using as collateral of the assets at these companies, it said.

Recently-issued Decree 65/2022/ND-CP on private placement of corporate bonds adds many strict requirements, making capital raising via the corporate bond channel very difficult.