Minister of Planning and Investment Nguyen Chi Dung, speaking at a meeting of the National Assembly on June 1 to discuss the current socioeconomic situation, said a recent report from the ministry (MPI) on business registration suggested that the real estate business continues to be the most adversely affected sector.

Minister Dung said, "Around 143,000 enterprises from all industries withdrew from the market last year, an increase of 19.5 per cent on-year. Some sectors saw a higher percentage than others, with real estate companies representing a 42 per cent jump and finance, banking and insurance witnessing a 35 per cent increase in withdrawals."

Other economic sectors to experience an increase in companies deregistering were education and training, with a 31 per cent rise, IT and telecoms up 28.5 per cent, and construction saw a jump of 18.8 per cent.

According to the minister's report, in the first five months of 2023 alone, just over 88,000 enterprises withdrew from the market, an increase of 22.6 per cent on-year. Again, the real estate business bore the brunt of these losses, up 47 per cent compared to the same period last year.

“The report strongly suggests that the real estate industry continues to be the most pressured and affected sector as the rate of businesses withdrawals from the market rose sharply in 2022 and continued to rise in the first five months of this year," he said.

On average, four real estate companies dissolve each day, and the larger real estate companies are also struggling. Novaland has just announced its profit projection for 2023, down more than 90 per cent on-year, and Vinhomes is considering selling some of its projects in Hanoi, Hung Yen, and Haiphong to foreign investors.

Minister Dung said, "The government and relevant authorities are implementing solutions for better access to capital, interest payment support, and developing the market, so it can better support businesses in overcoming periods such as these."

To compound the sector's problems, according to the MPI's report, the number of newly established real estate enterprises in the first five months of 2023 was just a little over 1,700, down 61 per cent on-year.