Shakeout hits Vietnamese real estate in 2023
Shakeout hits Vietnamese real estate in 2023
Some 1,300 property firms withdrew from the Vietnamese market in 2023, up nearly eight percent year on year, reflecting part of the gloomy real estate market last year, according to the General Statistics Office.
Property projects in Thu Duc City, Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre |
In fact, the industry was in serious trouble due to consecutive quarters of negative growth in 2023.
The unexpected meltdown of the property sector, transforming from a ‘busy’ status to stagnation in a short time, showed the potential uncertainties of the local real estate market.
Over the past decade, the real estate market has experienced significant growth, with property prices soaring in several localities.
At the peak of the market, multiple investors rushed to buy homes and land lots, causing concern over a housing bubble.
Many real estate companies succumbed to land fever, resorting to securing bank loans and mobilizing capital from various sources to participate in the housing investment race.
Therefore, the market turned out a series of luxury houses and high-end properties, while there was a severe shortage of affordable homes.
The ongoing real estate downturn is anticipated to weed out unhealthy property firms and weak investors who relied on financial leverage to generate profits, rather than contributing to the development of a sustainable real estate market.
After the shakeout, only firms with solid and sustainable business models and those focusing on meeting the needs of consumers are left standing.
Speaking at a conference in August 2023, Prime Minister Pham Minh Chinh underscored that all stakeholders, including state agencies, departments and ministries, real estate developers, and consumers, must join hands to remove all obstacles facing the property market.
The prime minister called on all the stakeholders to be more responsible for mutual benefits and the strong rebound of the real estate market in 2024.
