The real estate market has been quiet since the beginning of the year. The situation became even more serious in recent months as the State Bank of Vietnam (SBV) tightened control over lending to the real estate sector, and additional regulations on private corporate bond issuance took effect.

The manager of a real estate company in HCM City said that layoff campaigns are planned. The firm has re-assessed officers’ capability to reshuffle the staff. One branch previously had 800 sales staff, but now has 150.

“The scale of branches has narrowed. The administrative division of the whole company has been streamlined and there are only 100 officers. If we did not cut personnel, we would not be able to exist for the rest of the year,” he said.

A large real estate firm in the city decided to stop recruiting new workers from October 2022 to March 2023 and cut wages by up to 35 percent. Director of a 100-worker real estate trading floor in Thu Duc District said his company has laid off 30 percent of workers. Some real estate firms paying fixed salaries to workers all have cut salaries. Meanwhile, the firms paying workers based on commission have maintained the scheme, he said. 

Le Hoang Chau, chair of the HCM City Real Estate Association (HOREA), confirmed that real estate firms are facing difficulties as the market is quiet and likely to fall into recession.

Some firms have had to scale down investment and business. They have postponed investment plans, stopped implementing existing projects, or not activated new projects. Some have also stopped issuing shares to increase charter capital.

Chau said that some real estate firms have laid off 50 percent of staff or cut wages. Because of need for capital, some companies have had to borrow capital from unofficial sources at high interest rates. 

Low capital flow has forced developers to sell products with sharp discounts of up to 40 percent. This poses risks for buyers, because most of the products are housing to take shape in the future.

The current situation is similar to 2008-2013, when the housing market was frozen. To solve problems, he asked the government and SBV to lift the credit growth rate limit by an additional 1 or 2 percent to have VND100-200 trillion capital for the economy, Chau said.

Anh Phuong