An agreement between Novaland, TPBank, and Ricons Construction Investment last week focused on the construction of The Grand Manhattan apartment-commercial-service complex located in District 1 of Ho Chi Minh City.

According to the deal, TPBank will provide financial support to ensure The Grand Manhattan continues to be implemented after a suspension period and provide credit packages for home buyers. Ricons assumes the role of a general construction contractor, committing to ensure quality and construction progress with the developer Novaland.

A TPBank representative said that in addition to focusing capital on priority areas, it will reserve a part of its credit for real estate projects that are efficient and in line with customer needs.

“Providing capital for Grand Manhattan to complete construction not only provides quality housing products, but also sits alongside the government’s goals to remove obstacles for ongoing projects and create supply for the market,” the representative said.

TPBank’s share partly speaks to outstanding issues – capital that has been frozen in previously approved projects will now be re-granted by the bank on the basis of in-depth evaluation and obstacles on legality being removed.

Developers and banks make recovery efforts, illustration photo / Le Toan

Interest rates gradually cooling down have also created a positive impact on the real estate market. Lower interest rates not only help homebuyers to be easier in their loans, boosting the demand for real estate to increase again, but also help businesses reduce the pressure of capital costs.

From there, businesses can offer more attractive sales policies, contribute to promoting liquidity in the market, and have more resources to complete unfinished projects and implement new ones.

Records from the market showed that, since the end of March, a number of new ventures have also begun to reopen their sales activities and accelerate the handover process. Most of the products on sale at this time come with many attractive incentives for buyers.

At the end of March, an agreement between Everland Group and HDBank also demonstrated the efforts of real estate businesses and banks in working together to remove some of the biggest issues.

HDBank will become a financial and banking service provider for all projects developed by Everland and its member units. Firstly, it will co-finance for a range of ventures such as the Crystal Holidays Harbor Van Don resort and entertainment complex in Quang Ninh province; Crystal Holidays Marina Phu Yen resort and commercial complex; and Xuan Dai Bay resort services and tourism complex. It will then expand to other projects later on.

Simultaneously, HDBank will deploy preferential programmes on loan packages exclusively for individual customers when performing transactions related to buying, selling, renting, and leasing real estate at Everland initiatives, providing payment services on a digitalised platform and a variety of financial and banking products.

Last month, VinaCapital chief economist Michael Kokalari assessed that the government has implemented many solutions to promote growth, most specifically tax cuts and interest reductions, which allow individuals and organisations to delay the payment of various taxes over 3-6 months.

“Real estate development, which accounts for nearly 10 per cent of Vietnam’s GDP, had essentially ground to a halt, largely because of the difficulties developers are having obtaining the approvals required to proceed with their projects,” Kokalari said.

“Some of the micro-level issues that the government’s recent actions seek to address include bottlenecks entailed in converting agricultural land for use in residential real estate and delays in the appraisal of land values for the determination of land-use/conversion fees payable to the government,” he added.

In addition to a $5.1 billion subsidised loan package to support the development of over one million new affordable housing units, the government has also provided guidance intended to make it easier for banks to restructure loans extended to real estate developers, as well as to other borrowers, although the details of these proposed forbearance measures are still being hashed out.

“The government has taken a series of initiatives to address the country’s slowing growth, the most concrete of which are tax cuts and interest rate cuts, but administrative measures that are intended to ease bottlenecks impeding real estate development and infrastructure could have an even bigger impact to support growth in 2023 and beyond,” Kokalari said.