Property sector struggles amid pandemic

Developers have had to delay launch of new products, resulting in falling revenues, while still having to pay salaries, electricity and water bills, office rentals, and loan interest, Nguyen Thi Thanh Huong, CEO of Dai Phuc Land Real Estate Business Investment Company, explained at a recent seminar on how the industry can overcome the difficulties brought by the pandemic.

Pham Lam, vice chairman of the Vietnam Association of Realtors, said 70 percent of brokerages have had to cut employees’ salaries or even temporarily close down.

A survey by the association found that half of brokerages in HCMC saw revenues fall by over 90 percent year-on-year, and 30 percent experienced declines of 50-70 percent in the last three months.

Trading floors have struggled to maintain operations and retain agents. They cannot persuade potential customers to buy currently due to social distancing, and so tend to switch jobs or even quit, Nguyen Tho Tuyen, chairman of BHS Group, said.

Nguyen Loc Hanh, CEO of the Asia Gem Real Estate Investment Joint Stock Company, said in HCMC, some 80 percent of brokerages have struggled since last year, having to cut staff, close offices, reduce salaries by 30-50 percent, or pay them late.

The incomes of agents working for small and medium-sized firms declined by 60-80 percent year-on-year in June, he said.

Experts said 20 percent of developers are likely to cut prices by 5-10 percent to get money to restructure portfolios and make bank payments.

Tran Khanh Quang, CEO of Viet An Hoa Real Estate Investment Joint Stock Company in HCMC, told VnExpress that the sluggish sales amid the ongoing fourth wave of Covid would force them to cut prices.

Lam said it is necessary to cut VAT and corporate income taxes and reduce loan interest for developers, defer payments and enable them to access soft loans.

"Realty enterprises look like they are infected with Covid-19 now, so they need oxygen, supportive policies, to overcome their difficulties."

Vietnam has recorded nearly 355,000 Covid-19 cases in the ongoing wave since late April.