Southern Vietnam real estate firms in distress

By Vu Pham, Huong Dung
Mon, November 14, 2022 | 5:28 pm GMT+7

Real estate businesses in southern Vietnam are in a very difficult situation, unable to sell their products even at big discounts.

They are having to make painful decisions to survive, like scaling down business, cutting their workforce and even selling land.

"My company has seen no transactions over the past four months despite many preferential policies. We have to cut down personnel, from employees to senior management, and even sell off land to have money to maintain operations," said the director of a real estate firm in Binh Duong province, which neighbours Ho Chi Minh City.

The director, who declined to be identified, said that his company had planned to launch two residential area and apartment projects in Binh Duong for sale in the third and fourth quarters of 2022 in order to get more capital for implementing its growth strategy. But the plans have collapsed with tightening capital flows.

"Since June, the company has only run project ads and offered products from some existing projects for sale while waiting for easier credit access. We had nearly 100 employees but half of them left. Now we can pay only about 60% of monthly salary for the remainder," he said.

The director added that in order to maintain operations, the company's leaders are trying to raise capital from relatives and friends, reducing product prices and selling some land lots.

Housing supply in HCMC in 2021 was down 33.6% against 2017. Photo by The Investor/Vu Pham.

Housing supply in HCMC in 2021 was down 33.6% against 2017. Photo by The Investor/Vu Pham.

Meanwhile, the Q3 business results of some enterprises in the southern region show how difficult the real estate market situation is, with most of their profit not coming from the sale of properties.

For example, the DK Group recorded more than VND36 billion ($1.45 million) in net revenue and nearly VND16 billion ($644,800) in net profit in Q3, mostly from investment cooperation and share transfers.

Phat Dat Real Estate Development JSC, a big name in the property market, reported a revenue of VND11 billion ($443,300) in Q3, compared with nearly VND1,267 billion ($51 million) in the same period last year. Its Q3 net profit of VND718 billion ($28.9 million) did not come from product sales but the transfer of 46% equity in Sai Gon-KL Real Estate JSC to a partner.

According to a Q3 market report by Savills Vietnam, primary supply in HCMC’s apartment segment was 6,600 units, down 51% quarter-on-quarter but up 120% year-on-year. Inventory accounted for about 66% of primary supply at 4,400 units, the largest since 2019.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association (HoREA), said housing supply in the southern metropolis in 2021 was 14,443 units, only 33.6% of the figure in 2017, when the local real estate market recorded its highest growth in a decade.

In the first half of this year, amid the strong post pandemic recovery of all sectors in the HCMC economy, real estate had experienced a negative growth of 5.82%, he noted.

In general, the city’s property market is going through an extremely difficult period with plunging purchasing power and liquidity, he said, adding that without selling properties, developers lack capital to implement projects. "Many of them have had to scale down their investments, delay construction, cut down the workforce, and offer discounts of up to 40% of contract value."

Chau said the main reason for this situation is difficult credit access for developers, buyers and investors. Property businesses have also faced obstacles in raising capital from private bond placements following the recent arrests of some business leaders for alleged fraud in the issuance and trading of corporate bonds. This has been followed by tightened supervision, inspections and punishments in a bid to make the bond market more transparent and healthy.

"The Government and the State Bank of Vietnam should consider expanding banks’ credit by 1 percentage point to have an additional VND100 trillion ($4 billion) in credit available for bolstering the economy during the year-end. This can create conditions for businesses, home buyers and investors to access credit for eligible projects," Chau said.

He also called for amendments to the 2013 Law on Land and related laws to facilitate market recovery and growth.

Chau said real estate firms had proposed that the Prime Minister considers setting up a special working committee or group to remove difficulties for some “typical firms and projects.” This would help enterprises regain their confidence and stabilize the real estate market, he added.

Comments (0)
  • Read More
De Heus, Hung Nhon to invest $380 mln in high-tech agriculture hub in southern Vietnam

De Heus, Hung Nhon to invest $380 mln in high-tech agriculture hub in southern Vietnam

Dutch agribusiness group Royal De Heus and Vietnam’s Hung Nhon Group plan to invest VND10 trillion ($380 million) to develop a high-tech agricultural ecosystem in Tay Ninh province between 2025 and 2030.

Industries - Thu, October 23, 2025 | 2:35 pm GMT+7

Consumer finance major F88’s credit rating upgraded on improved funding capability, liquidity

Consumer finance major F88’s credit rating upgraded on improved funding capability, liquidity

Vietnamese credit ratings agency FiinRatings has upgraded F88's credit rating from “BBB-” to “BBB”, with a “stable” outlook, citing the company's enhanced capital-raising ability and improved liquidity position.

Companies - Thu, October 23, 2025 | 2:00 pm GMT+7

Vietnam's benchmark VN-Index could surpass 2,000 points in 2026: exec

Vietnam's benchmark VN-Index could surpass 2,000 points in 2026: exec

VN-Index could top 2,000 points next year, said Huynh Minh Tuan, founder of FIDT - a Ho Chi Minh City-based investment consulting firm.

Finance - Thu, October 23, 2025 | 10:55 am GMT+7

Key factors helping firms export to demanding markets: DH Foods exec

Key factors helping firms export to demanding markets: DH Foods exec

Don’t treat business as a week-to-week or month-to-month affair. To go the distance, you must conduct business ethically, writes Nguyen Trung Dung, CEO of DH Foods.

Consulting - Thu, October 23, 2025 | 8:00 am GMT+7

Gold exchange, gold derivatives, gold ETFs proposed to be launched in Vietnam

Gold exchange, gold derivatives, gold ETFs proposed to be launched in Vietnam

Forming a gold exchange under state management in Vietnam is suitable to the reality, said Dao Xuan Tuan, head of the foreign exchange management department under the State Bank of Vietnam (SBV).

Finance - Wed, October 22, 2025 | 9:00 pm GMT+7

Real estate major Novaland wins key approval for $5 bln project in central Vietnam

Real estate major Novaland wins key approval for $5 bln project in central Vietnam

Novaland Group (HoSE: NVL), one of Vietnam’s leading property developers, has received investment approval for its flagship project worth $5 billion in the central province of Lam Dong after years of delay due to legal obstacles.

Real Estate - Wed, October 22, 2025 | 4:20 pm GMT+7

Vietnam's plastics heavyweights Tien Phong, Binh Minh report profit surges

Vietnam's plastics heavyweights Tien Phong, Binh Minh report profit surges

Tien Phong Plastic (HNX: NTP) recorded pre-tax profit of nearly VND949 billion ($36.04 million) in the first nine months of the year, exceeding its full-year target by 10.85%, while Binh Minh Plastic (HoSE: BMP) achieved record net profit of VND350 billion ($13.29 million) in Q3, surpassing its VND330 billion milestone set in the previous quarter.

Companies - Wed, October 22, 2025 | 4:17 pm GMT+7

Vietnam, Finland firms sign multiple MoUs on satellite, cybersecurity, aviation partnerships

Vietnam, Finland firms sign multiple MoUs on satellite, cybersecurity, aviation partnerships

A series of cooperation agreements were signed between Vietnam and Finland on Tuesday, within the framework of Party chief To Lam's official visit to Helsinki, while bilateral relationship was lifted to a "strategic partnership".

Economy - Wed, October 22, 2025 | 12:43 pm GMT+7

Trung Nam Ca Na seeks to convert agri-forest land for $147 mln industrial park in central Vietnam

Trung Nam Ca Na seeks to convert agri-forest land for $147 mln industrial park in central Vietnam

Industrial park developer Trung Nam Ca Na is seeking approval to convert about 170 hectares of agricultural and forest land for the construction of a VND3,875 billion ($147 million) project in Vietnam’s central coastal province of Khanh Hoa.

Industrial real estate - Wed, October 22, 2025 | 10:54 am GMT+7

PV Power's arm posts 5-fold jump in Q3 profit on margin recovery

PV Power's arm posts 5-fold jump in Q3 profit on margin recovery

PetroVietnam Power Nhon Trach 2 JSC (HoSE: NT2) reported a sharp rebound in third-quarter earnings as improved margins and higher revenue lifted profits nearly fivefold from a year earlier.

Companies - Wed, October 22, 2025 | 8:37 am GMT+7

TCBS overtakes SSI to become Vietnam’s largest securities company by market cap

TCBS overtakes SSI to become Vietnam’s largest securities company by market cap

Over 2.3 billion shares of Techcom Securities JSC (TCBS) debuted on the Ho Chi Minh City Stock Exchange (HoSE) on Tuesday. The stock, TCX, recorded the highest price and the largest market capitalization in the Vietnamese securities sector.

Finance - Tue, October 21, 2025 | 10:27 pm GMT+7

Indonesia’s palm oil industry becomes investment magnet

Indonesia’s palm oil industry becomes investment magnet

Indonesia’s palm oil sector attracted IDR52.7 trillion, or approximately $3.2 billion, in investment during the first nine months of this year, with the money going into enabling the country to capture more value out of its top commodity, the country’s Ministry of Investment reported.

Southeast Asia - Tue, October 21, 2025 | 9:34 pm GMT+7

Indonesia reports strong job, investment growth

Indonesia reports strong job, investment growth

The Indonesian Coordinating Ministry for Economic Affairs reported strong job and investment growth during the first year of President Prabowo Subianto’s administration, compared with the first year under his predecessor.

Southeast Asia - Tue, October 21, 2025 | 9:29 pm GMT+7

Singapore grants conditional approval for 1GW low-carbon power import from Malaysia

Singapore grants conditional approval for 1GW low-carbon power import from Malaysia

Singapore has granted conditional approval to import 1 GW of low-carbon electricity from the Malaysian state of Sarawak, marking a new phase in the energy partnership between the two countries.

Southeast Asia - Tue, October 21, 2025 | 9:26 pm GMT+7

Margin lending in Vietnam’s stock market hits record, but not worrisome

Margin lending in Vietnam’s stock market hits record, but not worrisome

Despite margin debt in Vietnam’s stock market surging sharply, experts believe that current margin pressure is not yet a major concern as top securities firms have significantly strengthened their capital buffers.

Finance - Tue, October 21, 2025 | 4:23 pm GMT+7

Lenders in Vietnam now in low-rate lending race: ACB exec

Lenders in Vietnam now in low-rate lending race: ACB exec

The biggest “headache” for banks in Vietnam now is that profit margins are getting thinner, said CEO of Asia Commercial Bank (ACB) Tu Tien Phat.

Banking & Finance - Tue, October 21, 2025 | 4:00 pm GMT+7