Real estate business closed due to lack of money
The picture of businesses closing down and dissolving due to lack of money is still happening. Recently, Housing Development and Trading Joint Stock Company (HDTC) issued a notice to all employees to take unpaid leave from November 26, citing lack of cash flow.
Housing Development and Trading Joint Stock Company has issued a notice to all employees to take unpaid leave due to lack of money.
Explaining this move, Mr. Dinh Chi Minh, Chairman of the Board of Directors and General Director of HDTC, said that the company's financial resources are currently extremely difficult, with no source of revenue to pay salaries to leaders and employees.
Therefore, to suit the current operating situation, the board of directors has agreed to streamline the organization, retaining only key personnel to strengthen the company in the immediate future.
"Therefore, the company announces that all officers and employees working at HDTC and its branches are temporarily on unpaid leave pending work," Mr. Minh stated in the announcement.
Previously, in Hanoi, PVR Company also received a certificate from the Hanoi Department of Planning and Investment on temporary suspension of business for one year from November 15, 2023 to November 14, 2024.
Regarding the reason for the suspension, PVR said that the company's bank accounts were frozen according to a court decision and in 2023, the company did not have funds to maintain operations, and it is expected that there will still be no funds in 2024.
The suspension is a time for the company to consider finding solutions and directions for the company to have financial resources to operate again.
PVR's business situation is quite difficult, from 2022 until now, it has not recorded any revenue. The small profit comes from the reversal of provisions when investing in securities.
PVR Company has also received a certificate from the Hanoi Department of Planning and Investment regarding the temporary suspension of business for one year.
In the financial report for the third quarter of 2023, the revenue section is blank. While still having to pay financial and business management costs, PVR lost 77 million VND in the third quarter. The accumulated loss as of September 30, 2023 was nearly 79 billion VND.
When will the real estate market recover?
The difficulties of the general market have also caused difficulties for large enterprises such as Dat Xanh Group (DXG). DXG's financial report for the third quarter of 2023 recorded an organizational structure of 86 subsidiaries.
However, among these, many companies are undergoing dissolution procedures such as Eastern Real Estate Joint Stock Company, Southeast Real Estate Investment and Trading Joint Stock Company, Dat Xanh Finance Company Limited, Binh Phuoc Real Estate Investment and Trading Joint Stock Company, Diamond Tower Investment Joint Stock Company, Ruby Tower, Sapphire Tower, Emerald Tower.
If more than 2 years ago, real estate businesses were the industry group with good Tet bonuses for employees, now, even though Tet is near, many businesses have announced that they will not have Tet bonuses.
In fact, even maintaining the company's operations has been difficult due to cash flow.
According to the Vietnam Association of Realtors (VARS), about 107 real estate businesses leave the market each month.
In the newly released Q3/2023 report, the Vietnam Association of Realtors (VARS) also said that the health of real estate businesses has shown signs of improvement, but not completely and widely.
Every month, about 107 real estate businesses leave the market. Many places are struggling to survive, operating with only a few core staff, "living on the belief" that the market will recover by the end of 2023.
According to a recent survey by VARS of its members, 60% of respondents said their customers would invest in real estate if interest rates continued to fall.
According to VARS, the total transaction volume in the market is gradually increasing. In the second quarter of 2023, the market recorded 3,700 transactions, an increase of 37% compared to 2,700 in the first quarter. By the third quarter, the market had recorded nearly 6,000 transactions, 1.5 times higher than in the second quarter and more than twice as high as in the first quarter of 2023.
However, in the first 9 months of 2023, the number of transactions was only about 50% compared to the same period and about 20% compared to the land fever period. VARS pointed out that the market still lacks social housing supply, affordable housing, prices are increasing continuously and there is no sign of stopping.
From another perspective, Mr. Pham Anh Khoi, Director of the Dat Xanh Services Institute for Economic - Financial - Real Estate Research (DXS - FERI) said that in difficult times, M&A and expanding cooperation are becoming a trend of major investors in Vietnam, including foreign investors.
Foreign investors have a clear development strategy and are well prepared, so they always have financial resources ready to cooperate when there is an opportunity.
However, for M&A activities to take place smoothly and for assets/projects to be priced at a reasonable level, both beneficial to the buyer and not harmful to the seller, the market is in dire need of a specialized, reputable and effective real estate investment promotion channel.
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