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Property market evades knockout blow as banks’ liquidity improves
The bottom has not fallen off the real estate market as feared after banks recovered their liquidity and did not call in loans, many of them against property.
Analysts had predicted that property speculators would make distress sales when banks, facing a liquidity crisis, demand repayment of loans, causing property prices to plummet.
But banks are again flush with funds now, and Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said they are unlikely to pressure borrowers.
Banks have to help failing businesses because “many businesses will collapse,” in turn affecting them too, he said.
Many banks recently decided to extend loan periods and asked customers to provide more collateral.
Chau said businesses and investors should, however, prepare to make payments on loans against property, many of which fall due at the end of this year.
Chau suggested businesses should unite to overcome difficulties and consider issuing bonds and launching real estate investment trusts (REITs) to generate capital.
Since it is hard for small companies to issue bonds, the introduction of REITs is imperative, he said, adding they have become highly popular in many countries.
The real estate market, which was booming until January this year, has lost steam this year.
Double-digit inflation and the tight monetary policy have pushed many medium and small developers to the brink of bankruptcy due to lack of funds.
Thanhnien
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