HCMC real estate agencies struggle to pay Tet bonuses

By Vu Le   January 19, 2023 | 08:15 pm PT
HCMC real estate agencies struggle to pay Tet bonuses
Office buildings, apartment blocks and houses in HCMC’s Eastern area. Photo by VnExpress/Quynh Tran
Many owners of real estate agencies in HCMC have had to mortgage their personal assets to pay salaries, bonuses and debts as the Lunar New Year holiday approaches.

According to the owners, this is the gloomiest situation in nearly a decade due to the slow down in the real estate market and cash shortages, which started in the second half of 2022.

Phu, chairman of a real estate company in District 1, said that five days before Tet he mortgaged a house his family is living in, his personal property, to obtain the several billion dong he needed to pay the 13th month salary and Tet bonuses for his employees, taxes, and debts owed to his firm’s partners. Tet falls on January 22-26. Tet bonus is the biggest and most anticipated reward for workers.

To save money, for the first time in a decade, his company has not held a year-end party, Phu said. "If the business does not improve in the first six months of this year, I will have to sell some assets and cut staff for the fourth time."

Similarly, the chairman of a real estate brokerage company with hundreds of employees has had to complete many procedures to get a personal loan of nearly VND10 billion ($462,258) to pay salaries and bonuses before Tet.

The chairman said he had mortgaged his house, land, and some other assets of his family. "This is the first time in the last 9 years that I have had to run up and down to borrow money before Tet like this."

Contrary to the heyday of the real estate market in the 2016-2017 period, when the company was flush with cash during Tet, this year it has almost nothing left to celebrate the holiday, he noted.

After managing to sell some properties in the first half of last year, his company found almost no customers in the second half.

To date, the company has yet to receive commissions from cash-strapped real estate developers. Nguyen, the director of a small real estate firm with over 10 employees after layoffs in the fourth quarter of last year, said he had to sell gold owned by his family to get VND300 million to pay salaries, taxes, fees, and office rents before Tet.

Having no cash to pay the Tet bonus, his firm has given employees red envelops with half of the 13th month salary inside, wishing them luck when returning to their hometowns to enjoy Tet.

According to Nguyen Loc Hanh, CEO of the Asia Gem Real Estate Investment Joint Stock Company, 10% of real estate companies have a sufficient funds to cover Tet spending, while 90% are facing shortages.

"In the current situation, managing to pay the 13th month of salary and Tet bonus is good news, because a lot of companies owe their employees salaries or have only paid a very small part of them," said Hanh.

"This is the gloomiest Tet since 2013." Huynh Phuoc Nghia, a senior consultant at advisory firm GIBC, also said it is difficult for the majority of real estate companies in the south to fulfill their Tet responsibilities.

The reasons include sluggish sales, cash shortages, difficulty in accessing loans, and a deadlock in debt recovery from enterprises.

"The capital thirst that appeared since the middle of last year is becoming severe in the weeks before Tet," said Nghia. "There will be many difficulties in the coming quarters."

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