He had bought a two-bedroom unit at a project in Thu Duc City (formerly Thu Duc District) in 2020.

By April this year he had paid over VND1 billion ($43,400) in two installments in line with construction progress.

From June to August the developers asked him three times to pay over VND400 million for the installment, but he has been unable to find the money. Amid the Covid-19 outbreak, he has found it hard to borrow from other people or collect his debts from partners.

He said: "Now, I cannot pay. According to the contract, if I pay late, I will be fined hundreds of millions of dong, and the contract will be liquidated. I hope the investor will freeze the interest."

Thy, a trader in HCMC’s District 9, who has stopped doing business since June because she lives in a locked-down area, said she bought a two-bedroom apartment for VND1.8 billion in the neighboring province of Binh Duong, and paid half the amount. She said she is very anxious after the developer warned her twice about not paying installments due in May and July.

"The investor threatened to liquidate the contract if I don’t pay by next week. I have to pay a fine of hundreds of millions of dong."

The business manager of a real estate company in HCMC’s Binh Thanh District said since the fourth wave of Covid began, 50 percent of his clients have failed to pay in line with construction progress, of whom 80 percent have bought apartments, houses or land using their families’ working cash flows. Many business activities have been affected because HCMC and many other southern localities have had to impose prolonged social distancing.

Most of the clients have asked the company to freeze their loan interest, while some want to liquidate their contracts and are willing to pay fines because they are afraid they can make little money amid the pandemic, he said.

Nguyen Loc Hanh, CEO of Asia Gem Real Estate Investment Joint Stock Company, told VnExpress that since June there has been a growing number of buyers in the primary market who have failed to pay in line with project progress.

Market liquidity has fallen, he said.

There are three solutions for cash-strapped developers and buyers, he said: Developers could freeze loan interests or liquidate contracts, fining buyers 20-30 percent of the contract value, or resell defaulting buyers’ properties in the secondary market and repay buyers after deducting brokerage fees.

The most sensible solution is freezing debts, not fining defaulting buyers, he added.

As of Monday, Vietnam has recorded nearly 344,000 Covid cases in the current outbreak that started on April 27.