Many real estate projects in the South are waiting to revive when capital flows are cleared.

Launched with a bang at a time when the market was hot, after a while, many projects suddenly stopped. The main reason was that the investors… ran out of money.

CT Plaza Nguyen Hong project has stopped construction for many years. Photo: Hoa Mi

Under construction, must stop construction

In 2018, the Vung Tau Pearl Tourist Apartment Project (Vung Tau City) was opened for sale to customers by Property X Company. Vung Tau Pearl was built on a land fund of more than 13,000 m2, with 4 towers 33 floors high, a total of 1,787 apartments, selling price from 45 million VND/m2, expected to hand over houses to customers in the fourth quarter of 2024. However, although it has built up to 20 floors, this project has had to stop implementation since the beginning of 2023 until now.

In Bien Hoa City (Dong Nai), in 2018, the project named Bien Hoa Universe Complex was opened for sale by the investor Tan Van Hoa Company. According to the advertisement, the project was built on an area of over 28,000 m2, including 7 apartment blocks with nearly 2,000 apartments, with prices starting from 2.25 billion VND/2-bedroom apartment. However, in 2022, the project suddenly stopped construction even though it had built more than 20 floors. To date, this project remains "inactive".

Binh Duong is a province with a series of projects that have stopped construction. For example, the LDG Sky Project in Binh Nguyen New Urban Area (Di An City), built on an area of over 20,000 m2, includes 5 30-storey apartment towers, with 1,659 apartments. The project is invested by LDG Company, opened for sale since 2018, and is scheduled to hand over houses by the end of 2023. However, this project has stopped after building the basement.

Or the New Galaxy Project, invested by Dai Phuc Company in Di An City. The project is built on an area of over 29,000 m2, with 6 20-storey apartment towers, including 1,900 apartments, currently under construction up to the 10th floor and has stopped implementation since 2022.

A series of other projects in Binh Duong are also in a similar situation, including: Astral City Project (Thuan An City), with nearly 5,000 apartments, a total of 8 blocks 40 floors high, although construction has reached the 8th floor, but construction has stopped since 2022; or Roxana Plaza Project (Vinh Phu Ward, Thuan An City), with a scale of 1,174 apartments, 32 floors, topped out from January 31, 2021. However, up to now, thousands of customers who have signed contracts to buy apartments in this project are very confused because they do not know when they will be handed over, because the project is stopping construction, with no date set to restart.

With the leading city of Ho Chi Minh City, where the demand for housing is very large, there are also many unfinished construction projects. For example, CT Plaza Nguyen Hong Project (Go Vap District), invested by Nguyen Hong Company, is built on a land area of 3,403 m2, construction area of 1,822 m2, construction density of 53%. The total construction floor area is 36,123 m2. The scale of the project includes 2 basements and 17 floors, providing 280 apartments with an area of 55 - 76 m2 and 18 shophouses with an area of 220 - 470 m2.

Enterprises that stop implementing projects are all related to financial and legal issues. Banks need to support and create conditions for project investors to access credit more easily.

The project was opened for sale in 2016, according to the sales contract signed with customers, the house must be handed over in December 2019. However, up to now, the project has only been built up to the 14th floor and has completely stopped construction since 2021.

At Hanoi Highway (Thu Duc City), the project named Metro Star also appeared with cranes that have been motionless for many years. Accordingly, this project is built on an area of 18,337.5 m2, construction density 40%, total floor area is 70,493.52 m2. The scale includes 2 towers with 6 blocks 25 - 30 floors high and 2 basements, a total of 1,600 apartments, 5 shophouses and 10 commercial townhouses. Phase I is expected to open for sale about 400 units, with an area of 52 - 65 m2. Sold to the market in 2018 and committed to handing over houses in May 2021, but up to now, the project has only dug the foundation and has not shown any signs of construction.

The project will be revived when capital flows in.

Mr. Nguyen Viet Hung, General Director of Westland, said that businesses that stopped implementing project construction were all related to financial and legal issues. When the market was hot, most businesses relied on issuing bonds and bank loans to implement projects. But since the end of 2022, the financial market has fluctuated, businesses have had difficulty accessing loans, and have had to pay high debts and interest. Businesses are running out of capital to pay off debts to construction partners. These difficulties create great pressure, forcing businesses to stop implementing projects.

“We cooperated with a business to develop the project and sell products. This business previously relied on bank loans to develop the project, however, after the bank stopped funding, the project had to stop. Currently, the business needs capital to continue building the project, so it has to access external capital to continue implementing it,” said Mr. Hung.

Chairman of the Ho Chi Minh City Real Estate Association (HoREA) Le Hoang Chau said that commercial banks need to innovate their understanding and implementation of lending in the direction of not lowering standards, but "loosening" a little more on loan conditions. From there, support and create conditions for real estate project investors, commercial housing, home buyers, and investors to access credit more easily in the current difficult real estate market situation.

“For projects that have a construction permit and have started construction, the bank can consider lending to the investor to pay for and cover the project implementation costs, with the loan amount not exceeding 50% of the total investment of the project. This will limit the situation where businesses have to stop implementation, causing many consequences for the market and customers,” Mr. Chau recommended.

Source: https://baodautu.vn/batdongsan/nhieu-du-an-bat-dong-san-phia-nam-cho-hoi-sinh-khi-thong-dong-von-d223892.html