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Monday, June 17, 2024

Realty firms struggle to stay afloat amid uncertainties

By V.Dung

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HCMC – Many realty enterprises have ceased operations in recent times, while the active ones have laid off staff or cut salaries amid market uncertainties.

Layoffs have recently become more widespread among not only medium and small-sized realty businesses but also large corporations. Subject to the business sizes, some have cut 20% of their employees and others have laid off 50% or even 70% of the total.

Meanwhile, personnel, still employed by the realty companies, have to accept lower pay.

According to the chairman of a real estate company, the restructuring of the workforce is the most painful decision as this will affect employees’ families.

Besides reducing the number of employees, many businesses have opted for a delay in property sale, product portfolio restructuring, financial balancing to ease the pressure from the market.

Many real estate brokering companies – whose operations rely completely on property sales – have to shut down their business.

The pressure on the real estate companies is building up in the run-up to the year-end when premise costs, salaries and allowances for employees, debts payable to suppliers, and commissions become due at the same time.

Failure to sell properties and mobilize capital from banks and clients have forced many companies to suspend real estate business to minimize their losses, said a company representative.

According to the latest report of the Finance – Economics – Real Estate Institute of Dat Xanh Services, 2,300 real estate enterprises had suspended their operations in the first 10 months of this year, an increase of 52.8% over the same period of last year. Meanwhile, nearly 1,000 enterprises had shut down their business operations, up 42% compared to the year-ago period.

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