Directive by the Government of Vietnam on Real Estate Enterprises Prioritizing All Resources for Debt Repayment
Real estate businesses must prioritize all resources to repay debts?
In Resolution 33/NQ-CP in 2023, the Government of Vietnam requires real estate businesses to have the responsibility to prioritize all resources to repay debts, especially bond debts; actively study and restructure prices and products to suit the actual needs of the market.
- Simultaneously, local authorities are required to strengthen effective monitoring and oversight of the local market situation to promptly take appropriate measures and solutions to prevent the market from "overheating" or "freezing," spreading rumors for price speculation to gain profits, supply-demand imbalance, and ensure the market operates according to the market mechanism.
the Government of Vietnam directs real estate businesses to prioritize all resources to repay debts?
Upcoming issuance of documents and decrees affecting the real estate market?
In Resolution 33/NQ-CP in 2023 issued by the Government of Vietnam on March 11, 2023, directs the implementation of several solutions to remove obstacles and promote the safe, healthy, and sustainable development of the real estate market.
The Government of Vietnam also acknowledges that 2022 was a year full of difficulties and challenges for the Vietnamese economy in general and the real estate sector in particular.
To address the limitations and difficulties related to the implementation of investment construction, business, and transfer of real estate projects, more in line with actual conditions and ensuring consistency and synchronization of the legal system, the Government of Vietnam directs the study to complete the institution, and build a related legal system for investment construction, housing business, and real estate to ensure uniformity and feasibility, focusing on:
- Urgently drafting and submitting to the National Assembly for approval the Land Law (amended), Housing Law (amended), Real Estate Business Law (amended), Bidding Law (amended), Auction Law (amended), Price Law (amended), Credit Institution Law (amended), etc.
- Actively researching, drafting, and submitting to the National Assembly for issuance of the "National Assembly Resolution piloting several policies to boost the development of social housing."
- Urgently amending and supplementing the guidance decrees for the implementation of the law to remove the current existing limitations, difficulties, and obstacles related to the implementation of investment construction, business, and transfer of real estate projects more in line with actual conditions and ensuring the uniformity and synchronization of the legal system. Focused on:
+ Completing and issuing the "Decree amending and supplementing several articles of the decrees under the state management of the Ministry of Construction" to remove difficulties and obstacles related to the implementation of real estate projects; more in line with actual conditions and ensuring the uniformity and synchronization of the legal system.
+ Completing and issuing the "Decree amending and supplementing the guidance decrees for the Land Law" to solve the difficulties related to land procedures, land valuation, granting land use rights certificates, and ownership rights for non-housing real estate (tourism real estate, resort real estate, office real estate, etc.).
+ Researching, drafting, and issuing the "Decree amending and supplementing the decree detailing and guiding the implementation of several articles of the Investment Law."
- Researching, drafting, and issuing the "Decree regulating the process, procedures for implementing commercial housing investment projects, urban areas" for local authorities to implement conveniently and uniformly.
Simultaneously, local authorities need to promptly issue regulations, guidance, and solutions to address difficulties within their decision-making authority; difficulties within the decision-making authority of the Government of Vietnam and the Prime Minister should be reported to the Government of Vietnam and the Prime Minister for consideration and decision.
- Completing the mechanism, policy to exploit and mobilize maximum financial resources domestically and internationally for housing development in particular and the real estate market in general.
Focus on the implementation of the scheme to build 1 million social housing units?
The scheme "Investing in the construction of at least 1 million social housing units for low-income subjects, industrial park workers for the period of 2021-2030" is one of the contents emphasized by the Government of Vietnam in Resolution 33/NQ-CP in 2023.
While awaiting the National Assembly's approval of the Housing Law (amended), the Government of Vietnam will draft and submit a proposal for the National Assembly to issue the "National Assembly Resolution piloting several policies to boost the development of social housing" to immediately remove some specific difficulties to create momentum for social housing development in the upcoming period. This includes addressing significant obstacles in recent times, such as:
(1) On land allocation for social housing project investment and construction;(2) On planning, allocating land funds for social housing development;(3) On selecting investors for social housing projects;(4) On incentives and benefits for investors;(5) On determining the selling price, rental price, rent-purchase price of social housing;(6) On the subjects and conditions entitled to social housing policies.
Additionally, the Government of Vietnam will promptly complete, issue, and effectively implement the scheme "Investing in the construction of at least 1 million social housing units for low-income subjects, industrial park workers for the period of 2021-2030" to immediately remove some specific difficulties in social housing development, increasing the supply in line with the needs and affordability of low-income individuals who have a high demand for housing.
At the same time, to support capital resources for social housing development, it is proposed to implement a credit program of about 120,000 billion VND (equivalent to about 12% of the capital demand to promote the goal of completing at least 1 million social housing units, worker housing for the period of 2021-2030)
This will allow investors and home buyers of social housing projects, worker housing projects to borrow at interest rates approximately 1.5-2% lower than the average medium and long-term VND lending rates of state-owned commercial banks (including Agribank, BIDV, Vietcombank, Vietinbank) in the market at each period, and non-state commercial banks that qualify with specific credit packages.
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