Covid-19 causes insolvency of real estate enterprises

Nearly 1,000 real estate enterprises have completed dissolution procedures in 2020 in Vietnam due to the impact of Covid-19, according to the Ministry of Construction.

A number of real estate enterprises had to go bankrupt due to Covid-19 in 2020. Photo: Doan Thanh

Experts have said that the Covid-19 pandemic had delayed the construction of many property projects in Vietnam, while trading floors have been shut down. In particular, investors in the hotel segment were unable to cover operation costs due to lack of guests, making them to sell their hotels at a low price. 

Last year, many real estate enterprises had to improve their capacity and increase adaptability to the pandemic. The number of the newly-established enterprises in the sector in 2020 was 6,694, down 15.5% compared to 2019.

In the last quarter of 2020, the sector slightly expanded compared to growth in the first quarter mainly thanks to the rapid recovery of the housing and industrial segments. This led to a positive growth for the whole year of 2020.

According to the Ministry of Construction, the real estate credit kept expanding in the whole year of 2020, except for the first quarter because of the Covid-19 outbreak. 

In addition to bank credit, which was the main source of capital, the real estate market lured inflows from other sources such as individuals, remittances and capital from the issuance of stocks, bonds of listed companies and foreign-invested enterprises.