Vietnam's real estate industry in suffers as thousands of projects halted

The situation has forced nearly 1,200 real estate companies to declare bankruptcy or dissolve by the end of 2022, an increase of 38.7% compared to the previous year. Additionally, real estate brokerage firms are facing losses, with many having to cut personnel, reduce salaries, and close offices. Tens of thousands of brokers have had to suspend their activities.

According to the Vietnam Real Estate Association (VNREA), policy mechanisms have not been thoroughly resolved, making it difficult for real estate businesses to implement projects and causing a serious decline in the real estate supply, with most of the supply consisting of high-end products.

Furthermore, there is a "blockage" of credit capital, bond capital, and even customer capital. Revenue has decreased while costs have increased, leading many real estate businesses to suffer from capital shortages and have to temporarily suspend their project implementation.

VNREA has proposed solutions to promote a healthy and sustainable real estate market. The organization suggests that the State Bank inject funds into the economy, including real estate development activities, to reduce market pressure.

For real estate companies experiencing difficulties, the State Bank of Vietnam should create conditions for these companies to postpone or defer loan repayments. Support should be given to businesses developing affordable commercial housing projects, social housing, and housing for workers and low-income people.

VNREA also recommends developing new funding channels, such as real estate investment trusts, securitization of real estate, and housing funds.

The association advises businesses facing difficulties to re-establish their business strategies and restructure the project's product segments towards increasing the low-price product segment for easier absorption and quicker cash flow.

VNREA also proposes stronger policies to promote social housing to create suitable products for the market and stimulate transactions, as well as to encourage and stimulate the development of commercial housing at a reasonable price.

In conclusion, the real estate industry in Vietnam is in dire need of effective policies and support measures from the government and the State Bank to overcome the challenges it is currently facing.

Source: VnEconomy