Property developer bankruptcy up nearly 40%

By Duc Minh January 30, 2023 | 06:15 pm PT

Apartments in the eastern part of HCMC. Photo by VnExpress/Quynh Tran

The number of Vietnamese property developer bankruptcies rose 38.7% last year due to insufficient cash flows and high raw material costs, according to the Ministry of Construction.

Property developers had difficulty accessing loans, issuing corporate bonds and mobilizing capital from customers, the ministry said, adding that the capital shortage forced many businesses to delay or suspend the implementation of many projects.

Many property developers had to cut production and human resources, with some companies even halving their staffs. Firms also had to cancel or postpone investments or initial public offerings.

Some firms also faced higher lending interest rates, fluctuations in foreign exchange rates, and higher prices of gasoline, oil and construction materials.

However, 8,593 real estate enterprises were also established last year, up 13.7% against the previous year. Meanwhile, 2,081 real estate firms that had suspended operations last year opened back up again in 2022.

Prime Minister Pham Minh Chinh recently urged the central bank to improve credit access for real estate businesses and buyers.

The prime minister also asked relevant agencies to promote the development of real estate projects, restructure the property market, deal with bad debts and corporate bond issues facing property developers, while further developing social housing and apartments for workers.