(Ảnh minh họa: Hoàng Huy).
Winter of the housing market
In the recently published strategy newspaper, VNDirect Securities Joint Stock Company said there are many signs that the domestic real estate market is entering a downward cycle.
Firstly, it is difficult for real estate businesses to find a way to reverse debt due to stricter regulations on corporate bond issuance and credit tightening. According to VNDirect’s estimate, there are about 46,145 billion dong of real estate corporate bonds that will mature in the first half of the year, 2023 and 64,185 billion dong, which are due in the second half of the year, 2023, causing liquidity pressure to repay loans for investors.
Second, the increase in home loan interest rates leads to a decrease in the demand for housing. Third, the decrease in new supply comes from the delay in the project approval process due to the revision of the Land Law.
CBRE data shows that sales revenue has decreased since the third quarter of 22 when the volume of apartments for sale plummeted 40% compared to the previous quarter, including HCMC and Hanoi. Similarly, the sales volume of mainland resort real estate dropped sharply by 70.4% qoq.
However, VNDirect estimates that this downtrend may be different from the bottom of the 2011-2013 cycle, partly because the “financial status of listed real estate companies is now better than in the previous downtrend.
In particular, the leverage ratio of businesses is now lower and the ability to make quick payments is stronger. The current interest payment ratio has fallen sharply to the lowest level in the period 2011-2013, which shows that the risk of default is as high as in 2011.
Although inventories are increasing, the lower inventory/total assets ratio indicates lower pressure to release inventory compared to the 2011-2013 period. Therefore, the “freeze” situation, if it occurs, may be shorter than before.
“We expect the bear cycle this time to be less intense and duration for a shorter time. In 2023, the average price of primary apartments is forecasted to decrease by 5-10% over the same period and the number of apartments for consumption to decrease by about 20% over the same period. Previously, in the period 2012-2013, the primary price decreased by 20-30% and the number of apartments consumed decreased by 50%.
The fact that the Land Law 2023 takes effect from the second half of 2024 will solve the bottleneck in the approval of new urban area projects, helping the housing supply to recover from 2024-2025,” VNDirect said.
VNDirect cũng nói thêm, công ty chứng khoán không lạc quan về sự phục hồi của BĐS nhà ở trong ngắn hạn do rủi ro mất khả năng thanh toán của chủ đầu tư vẫn là mối lo lớn nhất. Nhà đầu tư nên chú ý vào các doanh nghiệp có cấu trúc tài chính lành mạnh và dòng tiền vững chắc từ doanh số bán hàng trước đó.
VNDirect also added, the securities company is not optimistic about the recovery of residential real estate in the short term because the risk of insolvency of the investor is still the biggest concern. Investors should pay attention to enterprises with healthy financial structure and solid cash flow from previous sales.
Short-term liquidity pressure
In the period 2020-2021, the market “witnesses a boom” of corporate bonds, especially real estate bonds, in the context that commercial banks have to reduce the maximum percentage of short-term capital used for medium and long-term loans. .
The value of bonds issued by real estate enterprises as of the end of the third quarter of 2022 is estimated at VND 507,000 billion, accounting for about 34% of Vietnam’s bond balance and about 6% of GDP.
From mid-2022, in order to reduce risks and enhance market transparency, the Ministry of Finance has reviewed and issued a new legal framework with stricter requirements for issuers, especially individually released.
VNDirect estimates that the total value of bond issuance has decreased by 43.5% over the same period to 248,603 billion dong, the redemption value is more than 142,200 billion dong in the first 9 months of the year.
Since several real estate business leaders have been arrested due to mistakes in the process of issuing and trading bonds, the market has raised concerns about the quality of Corporate bonds and the solvency of the issuer. onion.
Currently, bank loans and bond issuance are important capital mobilization channels for real estate developers in Vietnam. “Amid the tightening of bank loans, the bond market ‘wobbling’ and sluggish sales, the cash flow of many real estate developers is gradually drying up.
In addition, about VND 20,000 billion of real estate bonds will mature in the fourth quarter; 107,299 billion VND and 112,061 billion VND, respectively, are due in the two years of 2023-2024. All of this makes the short-term solvency of real estate businesses facing many challenges, “said VNDirect.
Weak home buying demand
As of mid-November 2022, home loan interest rates of state-owned banks and private banks increased sharply, 190 basis points to 11.1% and 230 basis points to 11.7% respectively. at the end of 2021, after deposit rates increase again.
VNDirect forecasts deposit rates may increase by more than 50 basis points in year 2023, thereby leading to mortgage lending rates of private banks likely to increase to 12.5-13%/year in 2023.
Securities companyrealizes the increased risk of loan default due to the escalation of house prices and the rapid increase in home loan interest rates in the period of 2022-2023, whereby it will become increasingly difficult for homebuyers to access both apartments and houses. middle-class households (less than 2,000 USD/m2) in HCMC and Hanoi, even those with twice the median annual income ($5,500-7,500), with an estimated payout-to-monthly income ratio has reached 80-100% by 2022.
Moreover, the situation could be even more difficult in 2023 as many homebuyers run out of interest rates and face current rising interest rates.
In addition, the securities company believes that many new projects may be delayed for sale in 2023, in the context of the legal approval process waiting to be cleared with the revised Land Law and the thinking of homebuyers. Weakened by limited credit lines, cost-push inflation and high interest rates.
“New supply of apartments in Ho Chi Minh City in the year 2023 remains low with about 19,000-20,000 units (down 10% yoy) and about 15,000 units sold (down 20% yoy). New supply of ready-built housing continues to be dismal in both Ho Chi Minh City and Hanoi, at 1,000-2,000 units for sale in 2023,” VNDirect forecast.
T&G Import-Export Joint Stock Company
Address: 352 Hue Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
Hotline: 02473010868
Email: hrm@tginterjsc.com
Website: http://tgimportexport.com
