Many Ho Chi Minh City property firms face going bankrupt unless they get a quick rescue.
Ho Chi Minh City Real Estate Association (HoREA) chairman Le Hoang Chau said many firms were in dire straits due to capital shortages.
“A number of firms have to pay big amounts in bank interest every day whereas their property products remain unsold,” said Chau.
In fact, property firms have tried their best to stay alive with business and investment restructuring or delaying project. Several firms accepted to sell products at losses to recoup capital alongside flexible payment schemes to customers.
Tai Nguyen Construction and Trading Company general director Vu Anh Tam, the developer of hi-end condo project Kenton Residences in Ho Chi Minh City’s District 7, said current hostile business climate saw property firms with back to the wall.
Tam said no bank wanted to offer loans to property firms given the current sluggish market liquidity.
He said homebuyers needed soft loans for house purchases and the construction, cement and steel sectors would also enjoy benefits when the market picked up.
“This chiefly depends on the state credit and land policies,” Tam confirmed.
To rescue firms Chau proposed banks effectively materialise government and State Bank commitments to easing lending rates to firms and set a concrete roadmap to bring down the rate to 11-12 per cent, per year.
Chau also proposed the Ministry of Finance and General Department of Taxation lower corporate income tax from 25 to 18-20 per cent and extend payment until the end of 2013.
Le Thanh Company director Le Huu Nghia proposed the state extend tax payments by one year for property firms.
“We did not ask for tax exemption, but just one year’s extension. We will pay off debts in 2013 when we get back on track,” said Nghia.
Former Trade Minister Truong Dinh Tuyen said: “Boosting demands is now crucial to better market liquidity, to rescue firms. The government may consider supporting real homebuyers with preferential credit policies,” Tuyen said.