30.4 per cent of real estate companies, or a total of 554, were dissolved in the first five months of 2023. Along with this, the number of newly registered property firms decreased by 61.4 per cent on-year.
In the first five months of 2023, 554 realty firms went out of business, up 30.4 per cent year-on-year. Others became worse off as their revenue and profit fell by nearly 7 and 40 per cent, respectively.
Mass dissolution and bankruptcy can strike so unexpectedly in the real estate sector that firms feel like they are living on borrowed time.
Despite improved liquidity compared to the outset of 2023, bank lending rates remain a key factor in resolving the current slowdown in the real estate market.
The construction ministry has raised two reasons for the non-disbursement of the credit package of VND120 trillion (US$5.14 billion) launched by the government about two months ago for developing projects to build social houses and houses for workers, and upgrade deteriorated apartment buildings.
The amended Housing Act lacks provisions on the life span of condominiums, which may cause problems for the authorities when it comes to renovating the buildings.
Land and industrial infrastructure rental costs are increasing by approximately 10 to 15 per cent annually in Vietnam, but according to the most recent analysis by Vietnamese real estate market research firms, land rents for development and infrastructure in the country's industrial parks (IPs) remain competitive compared to other emerging markets.
Inauspicious market conditions have compelled many producers to make a U-turn on ventures into real estate to focus on core areas.
The development of eco-industrial parks is considered an effective solution to contribute to completing the net zero emission target by 2050 in Viet Nam. However, there are still many problems with the mechanism.
Cash flow always looks to more attractive investment channels with higher returns, so when interest rates decrease, cash flow will shift from the savings channel to the stock and real estate markets, according to experts.