Circa 500 transaction centres close due to real estate downturn

March 15, 2020 | 11:45

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Impacted by slow project approvals and the COVID-19 epidemic, around 500 of the total 1,000 real estate transaction centres were partially or fully closed nationwide in the first two months of this year.

According to Nguyen Van Dinh, deputy general secretary of the Vietnam Real Estate Association, transaction centres have been performing poorly as a number of projects have been stuck under review and could not be launched to the market.

circa 500 transaction centres close due to real estate downturn

Roughly half of Vietnam's property transaction centres closed in the first two months. Photo Trong Tin

For projects which were eligible for launch, developers still had to cancel plans because such events have been banned and buyers would not come due to the COVID-19.

Not being able to launch new products left developers and brokerages without profit and thus without funds to pay salary and operation expenses.

Among the 500 centres that were closed, 200 announced that they closed temporarily to wait out a market rebound while the 300 others closed partly. The latter group had to laid off part of the staff or divide them into smaller teams to work in rotation.

“This helps us keep the centre alive by cutting as much of our expenses as possible and trying to overcome this difficult time,” said Nguyen Hoang Hai, head of a centre located in District 9 of Ho Chi Minh City.

To cope with COVID-19, the government ordered all public events, including launching events, to be cancelled. In addition, the economic downturn also makes property buyers more hesitant.

“The demand is still there but buyers have taken on a wait and see approach because they do not want to make large purchases in such a difficult time,” Dinh said.

Figures from the Ministry of Planning and Investment also show that in 2019, the real estate sector had the highest percentage of dissolved enterprises with more than 680, an increase of 39.4 per cent compared to 2018.

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