1,300 real estate companies close down this year

By Duc Minh, Le Quan December 31, 2023 | 03:08 am PT

Apartment buildings in District 2, Ho Chi Minh City. Photo by VnExpress/Quynh Tran

Around 1,300 real estate companies have gone bankrupt this year, an 8% increase compared to last year, according to the General Statistics Office.

Among the firms that left the market, the number of companies that suspended business for a limited time increased by 21% compared to 2022, while the number of companies waiting to complete procedures to be disbanded increased by 29%.

On average, 14,400 units left the real estate market every month.

Real estate as a field has the highest number of companies closing down, with 1,300 doing so this year, an increase of 8% compared to 2022.

On average, 107 businesses have gone bankrupt every month, while the number of new businesses being established dropped by 45% compared to last year.

Vietnam's real estate market has been in hot water since 2022, and the situation has persisted until now, even with assistance from the government. Experts said there were issues regarding the law, land handovers, pricing and capital, among others.

The precarious real estate scene has caused several projects to be delayed, incurring losses for construction and material businesses.

Statistics from the Ministry of Construction reveal that the total revenue of several companies under the ministry, including HUD, Coma and Vicem, has decreased by 16% compared to 2022. Their profit has also dropped by 66% compared to last year, to VND1.38 trillion ($56.86 million).

In a report sent to the Economic Commission, the construction ministry said the real estate market still harbors instabilities, stemming from the risk of a crash, lack of supply and inappropriate goods structure, among other factors.

The latest data from the ministry also revealed that the number of successful transactions in the first three quarters of this year did not even reach half of the total numbers in 2022.

Several projects were either delayed or suspended due to legal and capital issues. The credit package worth VND120 trillion has only seen VND83 billion being disbursed, less than 0.07%.

Analysts anticipated that the real estate market next year will still encounter supply and liquidation difficulties, but it will be a transitional phase for 2025, when amendments to the laws regarding housing and real estate go into effect.