A number of realty businesses said their loan applications have been rejected by banks for a myriad of reasons.
One such company, Le Thanh Co, was told that its application needs to be approved by the credit committee of the bank’s branch first, and then that of its headquarters.
“Even when it is approved, it will take at least several months to receive the money,” said Nghia.
He added that the company’s project, Le Thanh Twin Towers, is still under construction. Most of the VND500 billion need for the project is sourced from the company itself, and bank loans make up only VND24 billion.
“We only want to borrow another VND50 billion, just in case the market remains frozen,” he explained.
Similarly Le Tan Hoa, CEO of Lilama SHB, said the company badly needs capital to proceed with its two unfinished projects.
“Yet the banks all turned me down, saying they have to wait for guidance from the central bank in offering loans to realty firms,” said Hoa.
“Banks will either refuse to lend you money, or give the excuse that they are restructuring business debts,” said Nguyen Bao Hoang, deputy CEO of Thu Duc Housing Development JSC.
“Some banks require borrowers to have a stable source of revenue to be eligible for loans,” he added.
A bit luckier is Duc Khai JSC, who recently inked a deal with Vietinbank on a credit package offered to customers of the former’s Era Town project in HCMC’s District 7.
Customers will be offered loans worth 70 percent the value of the apartment they are to buy, said the company’s CEO Nguyen Ngoc Lam.
“Vietinbank also promised VND1.2-trillion in credit assistance to speed up the project construction.”
Waiting for lower rates
“Real estate prices have reached their bottom over the last few years, providing a good chance for customers like us,” said Thuy Linh, who recently purchased a 70-squar-meter apartment from The Era Town project.
Linh said she was only able to make up her mind when Vietinbank offered the credit help, adding however that she is concerned about the high interest rate.
“If lending interest rates do not go down in the future, it will be a problem for civil servants like us,” she said.
Hoang Anh Tuan, CEO of Tac Dat Tac Vang, said the largest issue for the realty market is weak liquidity.
Thus, customers should be provided with loans to enable them to buy houses, he said.
Though real-estate has been removed from the non-encouraged sectors for lending, interest for this sector still remain high, businesses complained.
“A bank promised to consider lowering the rate for my old loans, but then quickly disappeared,” said Hoang of Thu Duc Housing Co.