Speaking at the forum, Nam said that capital for the development of Vietnamese property firms’ projects primarily comes from bank loans and customers, while the Government has taken measures to limit lending to the real estate sector for fear of defaults, VnEconomy news site reported.
The central bank had earlier issued a road map to tighten control over property loans, he said. Between January 1, 2020, and September 30, 2020, commercial banks can use short-term capital to finance mid- and long-term loans at a maximum ratio of 40%, a reduction from 45%.
The risk ratio of loans for the real estate sector has been adjusted upward 200% from 150%, causing banks to be increasingly cautious about offering loans to real estate firms.
Apart from the difficulty in accessing loans, some legal bottlenecks and complicated procedures on planning, construction and site clearance have made life hard for property developers.
An incomplete legal framework has hampered the growth of the property market, he added.
Nam said that tightened administrative procedures and the slow issuance of construction licenses have reduced the number of projects.
Recently, bogus real estate projects have spread. Also, the transactions of housing purchases, sales and handovers have violated prevailing regulations, increasing pressure on the real estate market. Nam said that the problem will be a major challenge for the market next year.
In addition, the shortage of information systems about the real estate market, and concerns over transparency in the market, are among key factors affecting the property market, according to Nam.