“In more than 20 years of working in real estate, I have never seen a period as difficult as this,” a business owner exclaimed to the writer. This statement also partly reflects the hardships of businesses as well as those operating in the real estate business. However, they are still resilient, finding ways to overcome the gloomy days.
Ms. Pham Thi Nguyen Thanh, General Director of Dat Xanh Real Estate Services Joint Stock Company (Dat Xanh Service) said that currently, the enterprise has the largest scale among real estate brokerage floors with a market share of about 33%. However, just because Dat Xanh is a large unit does not mean that it does not encounter difficulties. The company is only less difficult than other enterprises thanks to the money accumulated over 20 years of doing business in the market.
According to Ms. Thanh, the recent period was a “great flood” for real estate brokers and no one was really “healthy” during this period. Of course, in “danger” there is still “opportunity” and businesses implemented many solutions to get through the “winter”.
“ Our system stretches from North to South. Before the credit crunch, our company had about 70 subsidiaries. When the market turned difficult, we restructured regularly and continuously, widely and deeply throughout the entire system, from the group level down to the member companies to ensure that we only retain the healthiest "cells" to overcome the difficult period," said Ms. Thanh.
This company used its experience during the COVID-19 lockdown to come up with emergency scenarios. When the credit market was tightened, the company immediately applied a series of scenarios at a higher level than during the pandemic.
The company adjusted, narrowed down its business lines, scale, operating areas, selected product lines, and cut down and streamlined ineffective departments. Even departments that were operating effectively but were not urgent were forced to prioritize more urgent resources.
According to Ms. Thanh, the company has focused on optimizing both financial and human resources. The company has implemented a series of activities to transform from a “fixed cost” model to a “variable cost” model.
“ We were determined to change state quickly to survive because we were all sitting on a boat to overcome the storm. Whatever made the boat heavy, we had to put down to keep the boat as light as possible to move,” Ms. Thanh shared.
In terms of human resources, the company has streamlined all departments and units. Each employee is required to do 2-3 tasks, even if these tasks are completely different. The company also continuously streamlines the brokerage staff. At its peak, Dat Xanh Service paid salaries to more than 7,000 sales staff, in addition to more than 10,000 collaborators. However, when restructuring, the company cut more than 60% of its staff to streamline the system.
“ We don’t have to cut it all off, but we’re switching from fixed costs to variable costs. We pay salaries to 40% of our employees, the remaining 60% will have people quit their jobs, but there are people who continue to sell products for the company as collaborators ,” Ms. Thanh shared.
Therefore, Dat Xanh Service's operations are still guaranteed thanks to the core staff remaining with the company. The company still pays salaries, maintains welfare policies and rewards outstanding individuals. However, if any employee is not effective, they are forced to "say goodbye" to the company.
The General Director of Dat Xanh Service said that the company also optimizes cash flow management activities. Because for a brokerage company, the main source of money for the company is brokerage fees. However, in the recent period, brokerage companies have been "in trouble" because investors are late in paying fees.
“ Our system accompanies more than 200 investors, that is why we owe a lot of fees. Currently, we are focusing on debt collection to bring back the money, the amount to be collected is about more than 1,000 billion VND ,” Ms. Thanh said.
In addition, businesses also focus on solutions to create new sources of revenue, diversify products and services, expand markets and expand customer base.
Ms. Dang Phuong Hang, General Director of CBRE Vietnam, shared that in the 30 years that this unit has been present in the Vietnamese market, the company has witnessed many changes and ups and downs of the market. Typically, the 1997-1998 crisis, which was a huge financial crisis in Asia, severely affected the real estate market. Or in the period of 2008-2009, the real estate market was also "frozen" for many years.
“ Thailand has more difficulties than Vietnam in terms of customer sources, but does not face difficulties in terms of legal issues, access to capital or financial resources like in Vietnam ,” said Ms. Hang.
According to Ms. Hang, real estate businesses in Thailand are continuously selling abroad to find customers. Initially, the results are relatively positive.
Tourists from Russia and China have returned to Thailand's tourist destinations to buy real estate, especially the Phuket area, which has attracted a lot of interest from customers.
In Vietnam, CBRE's real estate sales team also faced many difficulties in the recent period. The company had to review all issues within the company.
The first is cost management, almost every week the company has to meet to review cost management. The second is to review the products, if the product sells well but the legality is unclear, the investor has problems, it will take a lot of time to collect money. Therefore, the selection of products to sell is also considered more carefully.
In addition, CBRE also expands to the secondary market due to the large customer base with real housing needs. In the secondary market, transactions are relatively stable. CBRE's main customers are foreigners, coming from Asian, European, American and Middle Eastern countries.
“ Foreign customers often do not encounter legal difficulties or access to capital like in Vietnam. They only care about whether the investment is safe and whether the profit is good or not,” said Ms. Hang.
According to Ms. Hang, in recent times, foreign visitors have shown little interest in real estate products in Ho Chi Minh City due to high prices. However, foreign visitors are more interested in products in the Northern region due to more attractive prices.
According to Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARS), in addition to the solutions that businesses are applying such as restructuring, cutting staff, and optimizing costs, expanding new markets is a very important task at present.
Some projects have been “frozen” and are lying dormant, so brokers do not need to continue pursuing them but need to develop new markets. Mr. Dinh believes that the investment demand in Vietnam is still very large. However, this demand is temporarily dormant and waiting for the opportunity to rise strongly. This demand, when cleared, will rise very strongly.
“ I see some Vietnamese real estate companies have stepped into the international market. They connect with domestic brokers to bring investors to foreign markets. Recently, in a sharing session about business plans in foreign markets in Quang Ninh, a company immediately had 100 collaborators to implement this plan ,” Mr. Dinh shared.
According to Mr. Dinh, currently, there are millions of people in the world working remotely online. These people often look for tourist destinations with reasonable prices to both rest and work. And with cheap room rates like in Vietnam today, tourists from the US, Europe, Korea, Japan, etc. are willing to come to our country to experience. It is important that brokers connect with customers.
Ms. Pham Phuong Hang, General Director of CBRE Vietnam, commented that this is the time when real estate brokers need to improve quality, standardize skills, increase customer trust and raise the level of brokerage.
“ Brokers are the first people that customers come into contact with in a transaction. If brokers behave unprofessionally and fail to build trust with customers, the transaction will “fail” even if the product is good and the investor is reputable. Brokers are the ones who restore customers’ trust and the market’s trust,” said Ms. Hang.
Sharing the same view with Ms. Hang, Mr. Pham Lam, Chairman of the Board of Directors and General Director of DKRA Vietnam, said that improving the quality of brokerage is an extremely important issue today. He has worked as a broker for nearly 20 years in Ho Chi Minh City and witnessed many ups and downs of the market.
Mr. Lam realized that the real estate market has its own challenges at any stage. Even in times of “prosperity”, there are still problems and consequences that often follow.
According to Mr. Lam, although the market has many difficulties, he still feels confident and optimistic. His company has changed its business status from “tightening the belt” to “tasting honey and lying on thorns” mode. This is a more “tense” and dangerous mode. However, the business does not strive in vain but strives persistently, persistently and methodically.
According to Mr. Lam, this is the time for individuals and businesses participating in the real estate market to “train” themselves, to see if they truly love the job or not, and whether they have chosen the right job or not. This is also the time to “filter out” those who are not passionate about the job. However, those who love the job and make an effort will receive good opportunities.
Mr. Lam believes that this is also a good time for real estate agents to review the difficulties that customers are facing, accompany customers and build trust with customers. When the market is warmer, customers will not turn their backs on those who are dedicated and enthusiastic.
“ In the past, when I was a sales person, there were customers who I took care of for 5 years before they bought my products. I always gave them advice or supported them when they needed it. Maybe the customers would not buy the product right away, but at some point, they felt the product was suitable for them, suitable for their ability to pay, then they would pay,” Mr. Lam confided.
According to Ms. Pham Thi Nguyen Thanh, General Director of Dat Xanh, to become a successful real estate broker, the broker's knowledge must be really good. In addition to understanding real estate law, the broker must have knowledge of economics, politics, society and good communication, understanding customer psychology...
Brokers must keep up with the “trend” to talk to customers when they want to discuss an issue that many people are interested in. Without enough knowledge and understanding, it is very difficult to stay in the profession, especially in the current period. A good broker is someone with very profound knowledge and is not a “broker” as people often call him.
In the past, brokers could find clients by sitting in one place, but now they can't find clients even if they look everywhere. This has caused some brokers to lose confidence in themselves and their profession. The most important thing for brokers to stay in the profession at this time is to believe in themselves.
" I believe that the market has ups and downs like a sine wave. As the saying goes, "after the worst comes the best." This is the time for each business and individual to reassess their strengths and weaknesses and supplement the necessary knowledge and skills ," Ms. Thanh shared.
Ms. Pham Phuong Hang, General Director of CBRE Vietnam, said that currently, there is still a lot of money in the pockets of investors and housing prices in Vietnam are also cheaper than in Hong Kong, Singapore or the Middle East. However, investors are still "reticent" due to current problems. The government and relevant agencies have also proposed solutions to handle the "bottlenecks". However, policy solutions have not yet had much impact on the market.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), shared that since mid-2022, the real estate market has shown signs of a “storm zone” and a crisis zone ahead. Therefore, VARS has made very strong recommendations on changing legal regulations.
“ We have made recommendations and participated in proposing amendments to the Land Law, the Real Estate Business Law, the Housing Law, the Investment Law, etc. We have compiled and summarized all the problems and overlaps of the regulations, from which we have proposed solutions,” said Mr. Dinh.
According to Mr. Dinh, VARS also urgently reviewed the difficulties of each project to resolve outstanding issues. The Association also proposed to the Government solutions to remove obstacles for businesses.
These proposals have been listened to by the Government and a preferential credit package of 120,000 billion VND has been issued. This is an important credit package to support investors and social housing buyers in urgent need of capital.
According to Mr. Dinh, from the beginning of 2023 until now, the State Bank has adjusted interest rates 5 times and after each adjustment, the State Bank must monitor the movements to adjust accordingly. However, Mr. Dinh said that the current mobilization interest rate is high, up to 8%/year. Meanwhile, real estate business only achieves a profit of 8-10%.
“ No one is foolish enough to invest money in real estate during this difficult period. I think that interest rates must fall below 5% to have hope that investors will return to the real estate market,” Mr. Dinh shared.
According to the Chairman of VARS, in the past, this unit has also made many recommendations on legal issues for resort real estate because investors spend money but are not recognized for ownership. Investors cannot prove that they are the owners of the resort real estate, so they cannot trade or buy and sell, leading to a loss of confidence in this segment.
Recently, the Government issued Decree No. 10 on the recognition of ownership rights for hotel apartments, resort apartments (condotel), officetel, resort villas... that meet the conditions prescribed by law. This is a very positive change and is suitable for the needs of people and businesses.
In the past few months, the real estate market has shown positive signs as the "big guys" in the real estate market have restarted projects.
Novaland has restarted the Novaworld Phan Thiet project (Binh Thuan province), Novaworld Ho Tram (Ba Ria Vung Tau province) and The Grand Manhattan (HCMC). Hung Thinh Corporation has also restarted the Merry Land Quy Nhon project (Binh Dinh) with the Marina Districk subdivision.
Phat Dat Group also continues to implement projects such as Cadia Quy Nhon, Bac Ha Thanh (Binh Dinh); Binh Duong Tower (Binh Duong); Serenity Phuoc Hai (Ba Ria Vung Tau) and project 39 Pham Ngoc Thach (HCMC).
Representatives of the above enterprises said that recently, investors and customers have been more interested in the projects than at the beginning of the year. The transfer of real estate products is also more active than before.
A representative of Hung Thinh Corporation shared that this unit has started to do business "slowly" again. Over the past month, Hung Thinh has also "closed" a few dozen apartments for customers. Although this number is still too "modest" compared to the scale of the corporation, hope is gradually being lit.
According to Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, the real estate interest index nationwide increased slightly by 1% in the second quarter of 2023. In Ho Chi Minh City, transaction demand gradually recovered well in the apartment and private house for sale segment.
“ The number of searches for apartments in District 10, Tan Phu, Binh Tan, Binh Chanh District and District 9 (Thu Duc City) increased by 5-9%. The demand for renting apartments in Ho Chi Minh City also increased by 8-17%, the number of interests and searches for land also increased by 6-7% compared to the end of 2022,” said Mr. Quoc Anh.
According to Mr. Quoc Anh, stable signals from the macro economy are helping the real estate market gradually recover. Currently, inflation is under control, interest rates and exchange rates are also gradually stabilizing.
The challenge remains enormous.
According to DKRA research, in May 2023, the supply of apartments, townhouses, and villas in Ho Chi Minh City decreased by 92% compared to April, with liquidity reaching only around 5%. This shows that the market is entering an extremely challenging period.
Overall, in the second quarter of 2023, the residential real estate market in Ho Chi Minh City and its surrounding areas still has relatively positive changes in both supply and consumption. Global market demand increased slightly compared to the first 3 months of the year, but is still low compared to the same period in 2022. It is forecasted that in the third quarter of 2023, the market will have positive signs but it is difficult to make a sudden change in the short term.
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