HCMC – The number of real estate enterprises that pulled out of the market in 2022 soared by some 40% year-on-year, according to data from the Agency for Business Registration.
Negative cash flows and higher prices of building materials sent many property firms into a tailspin, said the Ministry of Construction.
The ministry said that several challenges plagued property enterprises last year, forcing many of them to change their administration and business methods.
Several firms restructured their debt and business activities, scaled down their operations, laid off their staff, suspended investment, halted work on multiple projects and delayed share issues as they found it hard to access loans, issue bonds and mobilize capital from customers.
Among other hindrances facing real estate firms were rising interest rates, high forex rates and the soaring prices of construction materials.
Meanwhile, home buyers also had difficulty accessing loans, leading to large numbers of homes being unsold. As such, real estate developers failed to recover capital and develop new projects.
To develop the real estate market stably and safely in the coming months, the Ministry of Construction asked relevant agencies to publicize information about housing, bonds, credit and shares.
Besides, the ministry proposed the Ministry of Public Security work with other competent agencies to promptly discover violations in real estate trading and investment to avoid negative effects on the local property and financial markets.
The ministry also urged the State Bank of Vietnam to consider giving higher credit growth limits to local banks so that real estate firms and home buyers can access loans more easily.
Real estate firms which develop social housing projects should be prioritized for loans, said the ministry.
The data also indicated that 8,590 real estate enterprises were newly established in 2022, up 13.7% year-on-year, while the number of property firms that resumed their operations in 2022 jumped by 56.7% against the previous year at 2,080, the local media reported.