Vietnam PM urges solutions to solve realty market woes

Prime Minister Pham Minh Chinh on Thursday asked the government, state agencies, and localities to continue solving problems in the real estate market in order to support national socio-economic development.

Chairing the government’s monthly national teleconference, the PM said solving market problems and credit crunch, which have hit the business community, would help related markets, such as the corporate bond market.

The government is set to hold other meetings to work on measures to lift the property market. The Vietnamese realty market experienced a rocky year in 2022 due to global economic headwinds and the credit crunch, low liquidity, and gaps between supply and demand.

At the end of 2022, the government set up an inter-ministerial taskforce dedicated to removing these difficulties.

On Thursday, the PM also urged the Ministry of Finance to submit to the government a drafted decree with amendments to Decree 65 on private placements of corporate bonds and trading on the domestic and foreign markets. A new decree is expected to replace Decree 65 to help improve the corporate bond channel.

Decree 65, which was issued on September 16, amends and supplements Decree 153 on private placement of bonds.

In terms of electricity prices, Chinh asked the Ministry of Industry and Trade to urgently amend the electricity price bracket and adjust prices appropriately.

In January, Vietnam’s macroeconomic situation was basically stable, according to a report by the Ministry of Planning and Investment. In the month, the consumer price index rose by 0.52% month-on-month and 4.89% year-on-year.

As of January 17, Vietnam’s credit growth had hit 0.65% compared to the end of last year, the report said.

Cash flow difficulties and escalating material prices were among the reasons behind a 38.7% year-on-year increase in the number of Vietnamese real estate businesses going bankrupt or being dissolved in 2022.

The latest report by the Ministry of Construction (MoC) also showed that last year, many property developers had to downsize operation scale and cut staff, with some laying off 50% of employees. In addition, many firms were forced to stop or postpone investment activities, project implementation and initial public offerings (IPOs).

The ministry attributed the situation to difficulties in accessing loans, issuing bonds and mobilizing capital from individual investors, leading to a shortage of capital for implementing projects. In addition, the arrests of some business leaders for corporate bond issuance violations had a great impact on the market and investor sentiment, it added.