Real estate businesses struggling amid pandemic hinh anh 1Illustrative photo. (Source: VNA)

Hanoi (VNA) - The severe economic blows from COVID-19 have forced scores of businesses to suspend operations and even file for bankruptcy, with real estate companies among the hardest hit.

As of the end of August, nearly 34,300 enterprises had temporarily suspended operations, a surge of 70.8 percent against the same period last year. Of these, 923 were in real estate, up a whopping 136.1 percent - the highest rate among Vietnam’s 17 sectors.

A total of 10,353 firms have closed down since January. This includes 620 realtors, with the real estate sector seeing the fifth-highest number of bankruptcies, after wholesaling, retailing, and auto and motorcycle maintenance and repair; manufacturing and processing; construction; and science, technology, marketing, and design services.

Meanwhile, the number of newly-established firms in real estate shrank 19.6 percent year-on-year in the first eight months.

Realtors had already struggled in 2018 and 2019, and their difficulties have become more severe in 2020 with COVID-19 outbreaks, Chairman of the HCM City Real Estate Association (HoREA) Le Hoang Chau said.

Many companies have seen revenue and profit fall sharply, he noted, with some becoming illiquid and deep in debt because of high levels of inventory.

The market has faced a host of difficulties since mid-2018 as a result of tighter cash flow control, said Nguyen Van Dinh, Vice Chairman of the Vietnam National Real Estate Association (VNREA). The challenges became more evident towards the end of last year, as capital flows into the sector were down, with fewer new projects.

He added that the sector continued experiencing hard times this year due to lengthy delays in granting permits to new projects as well as tightened credit.

The Vietnam Association of Realtors (VARS) has suggested local real estate companies shift their focus to low-cost housing and social housing projects, which remain in high demand./.