HANOI, June 1 (Xinhua) -- More than 88,000 companies in Vietnam have closed their business in the first five months, most of which were engaged in developing and selling properties, according to the latest data released by the General Statistics Office (GSO).
"The data showed the real estate sector continued to be hardest hit as the number of property companies shut down increased sharply by 42.4 percent in 2022 from a year earlier and by 47.1 percent in the first five months of 2023," said Minister of Planning and Investment Nguyen Chi Dung, state-run radio broadcaster VOV reported on Wednesday.
In the first quarter, Vietnam recorded a 63-percent fall in the number of new companies in the real estate sector from a year earlier, while permanent business closures in the sector rose 30 percent and the number of companies temporarily shut down increased 61 percent over the period, according to the Ministry of Construction.
Real estate firms were forced to downsize operations and cut staff. It is estimated that between 30 percent and 50 percent of real estate brokerage firms either closed their doors for good or ceased operations in the first quarter compared to the fourth quarter last year, the construction ministry added.
Vietnam's economy in the first quarter grew by 3.32 percent, the second lowest rate since 2011, partly due to a contraction of 0.8 percent of the contraction sector, according to the GSO.
The troubled property sector has struggled to raise funds, from both bank loans and corporate bonds, which led to stalled projects since last year.
Many Vietnamese property developers are selling assets at discount prices as they have been under severe liquidity stress amid difficult market conditions, said the investment minister.