Southern Vietnam real estate firms in distress
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.
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.
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