HCMC – Prime Minister Pham Minh Chinh has instructed the Ministry of Construction to assist in revitalizing the long-dormant real estate market, as current reports indicate that only 30-40% of property brokerages are able to remain operational.
During the Government meeting held in May, the ministry, along with relevant agencies, was tasked with streamlining paperwork for eligible real estate projects.
Furthermore, it was directed to collaborate with the Ministries of Public Security and Natural Resources-Environment to finalize a web portal dedicated to housing and the real estate market, connecting the land database with the national population database by June.
Market watchers suggest that the woes faced by the real estate sector could impact other businesses and the economy as a whole, given the interdependent relationships between real estate, insurance, banking, and securities.
According to a market report released by the Vietnam Association of Realtors (VARS), 554 real estate companies have pulled out of the market in the first five months of the year, a 30.4% increase compared to the same period last year.
The number of new entrants into the market has also plummeted by a staggering 61.4% compared to last year, with a total of 1,744.
“The escalating inventory, coupled with a sharp decline in income, have compelled developers to halt operations due to insufficient resources to complete half-done projects and have resulted in staff layoffs to reduce costs,” stated VARS in its report.
During the first five months of the year, property transactions were woefully insignificant, with only 19,000 transactions recorded during this period, equivalent to 17% of the total in 2018.
If the current situation persists, VARS predicts that by the end of the third quarter, 23% of the country’s real estate firms may exit the market, and only 43% would be able to resume operations by the end of the year.
Should the circumstances continue unchanged, nearly one-fourth of the real estate companies in the country may withdraw from the market by the third quarter, with only 43% able to sustain their operations until the end of the year.