This stance, voiced by the Prime Minister, shapes the approach to receiving and amending Circular 06/2023/TT-NHNN and Circular 03/2023/TT-NHNN of the State Bank, addressing real estate loan-related content.
Government and Central Ministries Intensify Efforts
In a recent communication addressed to the Prime Minister and the State Bank of Vietnam, the Ho Chi Minh City Real Estate Association (HoREA) highlighted that Clause 9, Article 8 of Circular 39/2016/TT-NHNN (revised and supplemented in Clause 2, Article 1 of Circular 06/2023/TT-NHNN) restricts credit institutions from offering loans to cover capital contributions for investment projects that aren't qualified for business commencement at the time the credit institution decides to lend. This, HoREA argues, contradicts Article 55 and Clause 1, Article 56 of the 2014 Law on Real Estate Business.
Precisely, the definition of "an investment project not qualified for business commencement" in Clause 9, Article 8 of Circular 39 differs from the concept of "conditions for future real estate to be put into business" in Article 55 and Clause 1, Article 56 of the Law on Real Estate Business 2014. This specific provision hampers credit loans for real estate projects, commercial properties, and urban developments just when investors require additional credit to advance construction.
Elaborating further, Mr. Lê Hoàng Châu, Chairman of HoREA, elaborated that at this juncture, after an investor has allocated substantial resources for land use rights transfer and received investment policy and construction permits from competent state agencies, the need for borrowing (additional) credit arises to fund the project's construction phase. However, despite possessing legal status during implementation, the project does not meet conditions for business commencement, thus thwarting the ability to gather capital from customers in line with Article 55 of the 2014 Law on Real Estate Business.
"If a project qualifies for business commencement, investors wouldn't resort to banks with higher interest rates. At that point, investors would be permitted to buy, sell, and lease-purchase future real estate, efficiently raising capital from customers. This constitutes the most economical and effective financing avenue for real estate enterprises, eliminating the pressure of interest and principal payments, enabling prompt project completion and handover to customers," emphasized Mr. Châu.
Following public concerns over these circulars, State Bank Governor Nguyễn Thị Hồng conveyed information to HoREA, clarifying that investors could still borrow even if a project is incomplete or hasn't met business criteria. Deputy Governor Phạm Thanh Hà previously noted that the State Bank tasked the Credit Department Director to review Circular 06 (effective from September 1, 2023) to accurately reference business conditions stipulated by the Law on Real Estate Business.
Recently, the Government Office issued a Notice highlighting the conclusions of Prime Minister Phạm Minh Chính at a Conference assessing the implementation of Government Resolution 33/NQ-CP, dated March 11, 2023. The conference proposed solutions to address difficulties and issues in the real estate market. The Prime Minister commended the endeavors of ministries, departments, branches, and local authorities in alleviating real estate market challenges. Nonetheless, persistent problems and challenges requiring prolonged resolutions still persist. The Prime Minister directed ongoing legal framework reviews to identify issues, pinpointing specific documents, content areas, responsible parties, and timelines for resolution.
Ho Chi Minh City Takes Urgent Action
In weekly meetings steering and managing Ho Chi Minh City's leadership endeavors, the focus on the "real estate symposium" has reached unprecedented levels. Some weeks see 4-5 meetings, each addressing the concerns of 5-6 projects. Leaders of Ho Chi Minh City's People's Committee directly engage with businesses to discuss project-related challenges and regulatory issues, yielding initial progress. Among the 156 projects undergoing legal evaluation, select projects from companies like Son Kim Land, Gotec Vietnam Co., Ltd., Gamuda Land, CapitaLand, and Novaland have been cleared to raise capital from customers, encompassing approximately 5,432 future housing units.
Notably, a task force has been established to eliminate challenges obstructing investment projects in the city. Comprising 14 members, the group is led by Chairman of the People's Committee of Ho Chi Minh City, Phan Văn Mãi, with Vice Chairman Bùi Xuân Cường serving as Standing Vice Chairman. The team's mandate involves addressing administrative hurdles tied to ongoing investment projects coordinated by city departments and agencies, facilitating streamlined document processing while ensuring chronological accuracy. Simultaneously, the task force scrutinizes regulations for discrepancies, overlaps, and inconsistencies, streamlining construction and investment progress.
Reports from Ho Chi Minh City and adjacent provinces reveal the real estate market's buying and selling activities are displaying positive indications. Mr. Lê Tiến Vũ, General Director of Cát Tường Land, asserted that due to collaborative efforts by the Government and ministries, businesses and investors now possess greater assurance, as policy-related predicaments are gradually being resolved. "Numerous Cat Tuong Land projects available for sale are attracting both investors and customers. Apart from profitable prospects, the clear legality of our offerings is the primary reason customers are drawn to our products," shared Mr. Vũ.
