Resolving Real Estate Bad Debt

4/11/2015| 15:51

Economic experts think that bad debt in the real estate area remains the worry of the economy. Spurring the consumption of the real estate inventory will make a contribution to reducing bad debts for the economy.

\r\n

Economic experts think that bad debt in the real estate area remains the worry of the economy. Spurring the consumption of the real estate inventory will make a contribution to reducing bad debts for the economy.

\n\n

Mr. Nguyen Tri Hieu, financial-banking expert, said that the State-owned enterprises, the guaranteed assets of real estate and the relevant shareholders of the banks are the three components of bad debts. As Mr. Hieu viewed it, at this time, bad debts cannot be resolved immediately due to a lot of reasons, in which the banks have failed to liquidate the guaranteed assets from real estate.

\n\n

\n\n

Real estate inventory is the worry of the economy

\n\n

According to the latest figures from the Construction Ministry, as of August 20, the total real estate inventory nationwide was estimated at VND 82,295 billion, in which it is notiveable that the inventory of condominium apartments is numbered at about 17,000 to VND 26,000 billion; the inventory of house foundations is 8.7 million square metres to VND 28,500 billion.

\n\n

According to the figures of the Ho Chi Minh City Association of Real Estates, as of 6 months of 2014, there were about 7,520 apartments in inventory, mainly with apartments of 70 square metres large.

\n\n

According to the economic experts, the real estate inventory is the primary reason for bad debts. Big bad debts have caused the congestion to the operation of the enterprises and the economy. The outstanding capital can make enterprises fail to get enough capital to continue to develop their production and business, even to fall into bankruptcy. And as Dr. Nguyen Minh Phong said, this can affect badly the activities of the service sector. As a result, the motivation of growth could be reduced, leading to the reduction of jobs, income and a lot of budget revenues.

\n\n

The big inventories have mainly concentrated in the high-grade real estate projects and the large-scale condominium apartments. So, the Government has to focus on restructuring the products in the real estate market, while enterprises should have to resolve bad debts by the market principles by lowering the selling prices, raising quality and shifting the function of the project so as to be able to increase liquidity.

\n\n

Expert Nguyen Tri Hieu proposed that as for the projects of social character such as low-income earners’ condominiums, the Government can rescue together with enterprises. As for the projects which are not suitable to the actual requirements of the market, it is necessary to recover for the other projects’ planning and we have to accept this waste.

\n\n

The macro policies of the Government are actively finding ways to clear the real estate inventory. Vice Minister of Construction Nguyen Tran Nam said that the Government has got Resolution 02 on resolving the inventory and bad debts, in which any locality that has the real estate inventory should restructure the products in order to clear the inventory in the market, limit to the maximum the use of the budget source for investment and new building of resettlement houses./.

\n\n

 

\n
Top