Illustrative photo. (Source: VNA)Hanoi (VNA) - The severe economic blows from COVID-19 have forced scoresof businesses to suspend operations and even file for bankruptcy, with realestate companies among the hardest hit.
As of theend of August, nearly 34,300 enterprises had temporarily suspended operations, asurge of 70.8 percent against the same period last year. Of these, 923 were in realestate, up a whopping 136.1 percent - the highest rate among Vietnam’s 17sectors.
A totalof 10,353 firms have closed down since January. This includes 620 realtors, withthe real estate sector seeing the fifth-highest number of bankruptcies, afterwholesaling, retailing, and auto and motorcycle maintenance and repair; manufacturingand processing; construction; and science, technology, marketing, and designservices.
Meanwhile,the number of newly-established firms in real estate shrank 19.6 percent year-on-yearin the first eight months.
Realtorshad already struggled in 2018 and 2019, and their difficulties have become moresevere in 2020 with COVID-19 outbreaks, Chairman of the HCM City Real EstateAssociation (HoREA) Le Hoang Chau said.
Many companieshave seen revenue and profit fall sharply, he noted, with some becomingilliquid and deep in debt because of high levels of inventory.
Themarket has faced a host of difficulties since mid-2018 as a result of tightercash flow control, said Nguyen Van Dinh, Vice Chairman of the Vietnam NationalReal Estate Association (VNREA). The challenges became more evident towards theend of last year, as capital flows into the sector were down, with fewer newprojects.
He added thatthe sector continued experiencing hard times this year due to lengthy delays ingranting permits to new projects as well as tightened credit.
TheVietnam Association of Realtors (VARS) has suggested local real estate companiesshift their focus to low-cost housing and social housing projects, which remainin high demand./.
VNA
