PM urges banks, developers work together on property problems

By Duc Minh, Anh Minh   February 17, 2023 | 06:37 am PT
PM urges banks, developers work together on property problems
Prime Minister speaks at an online meeting on February 17, 2023 to untangle difficulties in the property sector. Photo by the Vietnam Government Portal
Government bodies, banks and developers should work together to solve problems in the real estate sector more quickly and effectively, Prime Minister Pham Minh Chinh has said.

The housing market has been struggling in recent months due to a supply imbalance, with high-end units outnumbering affordable ones, Chinh said at an online meeting Friday.

People with low and average incomes have been unable to buy homes as demand has unreasonably inflated prices.

The property sector has been in crisis since the third quarter last year.

In 2022, 40% more property companies went bankrupt than in 2021. Even Vietnam’s largest developers are slashing staff sizes or selling off their assets to survive one of the most challenging moments the sector has faced in recent memory.

Chinh said government agencies, banks and businesses have been slow to act towards resolving real estate sector issues.

Local government officials have been delaying the approval of property permits because they’re afraid of making mistakes, the PM continued.

He added that property developers had also been to slow in addressing problems they had caused.

The PM thus argued that "all agencies and businesses involved" needed to "work together" to ensure sustainability.

"Without a harmony between the government, businesses and the people, development cannot happen," he said.

Property prices need to be brought down to reasonable levels to push economic growth, instead of hampering it, according to the PM.

He tasked government bodies with looking into policy problems blocking the mobilization of capital and access to credit.

Property developers need to restructure their product portfolios and accept lower profits, or even losses, he said.

Chinh told banks to lower their expenses to bring down loan interests and restructure loans.

"Banks can only grow when the economy grows," he said, adding that Government bodies needed to speed up administrative procedures.

The government is currently working to issue a dedicated policy on developing residential property for workers and low-income people.

Four state-owned banks have agreed to set aside a credit package of VND120 trillion ($5 billion) for the development of social housing and workers’ housing projects, central bank governor Nguyen Thi Hong said.

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