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This positive move came about soon after the Prime Minister held a high-level meeting to resolve issues plaguing the entire real estate business world with many vital projects on hold for a very long time.
Call for accountability
Dr. Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, said that the Prime Minister had asked for accountability from all those who were involved in real estate. Dr. Luc said we all need to better understand the message sent out by the Prime Minister, and not believe that the Government has abandoned the issues that are troubling the real estate market. He added that the Government was concerned deeply about credit and fiscal issues, debt restructuring, tax reduction, and bonds maturity, in order to support the real estate market and revive it once again. Businesses must now look back on what they can and cannot do because many real estate companies are still not doing their best.
Dr. Luc said that the real estate market is facing many unusually negative factors. However, now we have a set of mechanisms and policies to resolve these hurdles. Hence, we must learn from our experiences and directly meet large enterprises and real estate corporations to hear their problems. We also need to refer to similar situations in countries around the world and seek to improve our domestic real estate market.
With reference to related policies, Dr. Luc said that there are short, medium, and long-term policies. The short-term policies will deal with immediate problems, such as legal issues that are impeding projects. This will allow hundreds of projects to be cleared and put into operation so that cash begins to flow back into the market once again. The Government is very much concerned in this matter and will aggressively follow through in their plan to activate and revive the real estate market again.
After the meeting with the Prime Minister, localities have stepped in more strongly to resolve long-standing issues, especially in Ho Chi Minh City where at least five meetings were held to discuss problems that were holding up some important projects. The issues confronting real estate bonds were also discussed as there are up to VND120,000 bln real estate bonds maturing this year, and around VND110,000 bln by next year. Novaland is the most active in negotiating with partners on how to deal with bonds that are about to mature. For medium and long-term solutions related to real estate credit, the Government will allow debt restructuring. Last year, credit grew by 14 percent and real estate grew by 24 percent.
Resolve impending issues
Almost every week, leaders of the People's Committee of Ho Chi Minh City are holding meetings with various departments as well as investors to resolve issues related to projects that are facing difficulties. Most recently, after a meeting with seven real estate enterprises, Mr. Bui Xuan Cuong, Vice Chairman of the People's Committee in Ho Chi Minh City, assigned departments and related branches to assume the prime responsibility of handling project groups of these enterprises and urgently discuss with project leaders the direction in handling of these projects.
Mr. Bui Xuan Cuong emphasized that the People's Committee of Ho Chi Minh City will accept all suggestions for real estate businesses and will focus on handling them according to regulations. For problems related to ministries, the People's Committee of Ho Chi Minh City will urge and propose speedy removal of problems that are impeding projects.
The Ho Chi Minh City Real Estate Association (HoREA) wants to remove obstacles in 116 real estate projects. Mr. Bui Xuan Cuong has assigned the Department of Construction to urgently coordinate with other related departments for advice in settling the concerned issues before May 5. The relevant departments and agencies will urgently review and resolve issues and handle problems within the legal jurisdiction of the department. For difficulties and problems falling under the authority of the People's Committee of Ho Chi Minh City, or central ministries and their various branches, then advice will be taken from the People's Committee of Ho Chi Minh City to resolve all impending issues.
On February 17, Mr.Phan Van Mai, Chairman of the People's Committee of Ho Chi Minh City, also sent an urgent dispatch to the Prime Minister proposing the application of the K-coefficient for projects above and below VND30 bln. According to the People's Committee of Ho Chi Minh City, the application of the K-coefficient in determining land prices as a basis for collecting land use fees and land rentals has many outstanding advantages. Applying the K-coefficient encourages units to promote efficiency in land use with approved construction planning criteria; and creates an initiative for investors in developing business plans and encourages them to improve land use efficiency. At the same time, this regulates land resources from profitable land use.
Currently, Ho Chi Minh City is actively seeking the discontinuation of 149 projects that are more or less redundant in nature, in which more than 100 projects have problems that are related to the inability in clearing payments.
