Real estate brokerage market is at an "alarming" level

Mr. Nguyen Van Dinh, Vice Chairman of Vietnam Real Estate Association, Chairman of Vietnam Real Estate Brokers Association.

Could you tell us about the difficulties that enterprises and real estate brokers are facing in the current context?

Currently, according to VARS statistics, the whole country has about 1,000 projects waiting for adjustment, review and approval. The value of these projects is about VND 800,000 billion (US$ 30 billion). The association's statistics also showed that tens of thousands of brokers were unable to sell goods, and investors were in the same situation.

Specifically, in the first five months of 2023, 554 real estate enterprises dissolved, up 30.4% over the same period last year. The number of newly established real estate enterprises also decreased by 61.4% over the same period, to only 1,744 units. In terms of revenue, more than 90% of VARS' member enterprises recorded a decrease in revenue in the first quarter of 2023 compared to the same period last year. In which, 39% of enterprises had a decrease of 20-50% in revenue and 61% decreased by more than 50% over the same period. Even some enterprises with less than 100 employees have a revenue reduction of up to 70-80%.

If the market situation continues to be difficult, 23% of enterprises can only maintain operations until the end of the third quarter of 2023. About 43% of enterprises can survive until the end of 2023. Difficulties caused by a decrease in product supply, a lack of customers, and a decline in transactions have caused the decline in the number of real estate brokers to become a sweeping wave on a large scale across the country.

The number of working brokers is only about 30-40% compared to the end of 2022, and there are no signs of stopping. It can be seen that the real estate market, real estate brokerage has always remained at an “alarming” level.

How do you evaluate the solutions of the Government and management agencies to support real estate enterprises?

Besides the real estate enterprises and real estate brokers themselves survived and got out of the difficult situation, the support from the Government, the State management agencies was also very close. They tried to research and come up with solutions to solve the real estate market.

This was reflected in the promulgation of a series of policies, such as Decree 08/2023/ND-CP, amending, supplementing and suspending the effect of a number of articles in the Decrees regulating the offering and trading of private corporate bonds in the domestic market and offering corporate bonds to the international market, Resolution 33/NQ-CP on a number of solutions to remove and promote the safe, healthy and sustainable development of the real estate market; credit package of VND 120,000 billion for social housing, five decisions to reduce interest rates of the State Bank, Decree 10/2023/ND-CP amending and supplementing a number of articles of decrees guiding the implementation of the Land Law.

VARS has mobilized all resources with a high concentration to contribute together.

On the one hand, encouraging the spirit of real estate individuals and enterprises. On the other hand, strengthening and updating the market situation, analyzing and evaluating arising problems and from there, making timely forecasts and solutions for enterprises to invest and develop.

Along with that, there are programs, and training courses of in-depth knowledge and skills were organized by VARS in collaboration with prestigious and professional training institutions in both face-to-face and online forms. VARS has analyzed, researched, exchanged and discussed with many experts in all fields of economics, finance, banking, and law to offer solutions and recommendations to the Government and the State management agencies.

However, because the market has been “hit” for a long time, all efforts of all sides have only stopped at the level to help the market hold up, unable to get out of the weakening state.

Faced with the difficulties, what should real estate enterprises and brokers do to overcome this, Sir?

When the market is difficult, all direct and indirect participants in the market face huge consequences. Suppose the “exit” is not found in time. In that case, the market will likely have to face the leave scenario of a series of real estate investment and development enterprises, business service enterprises and real estate brokers.

However, the real estate industry still recorded some positive information about personnel. Specifically, over 95% of working brokers said that they would continue to stick with the profession even though the market was difficult; 100% of them wanted to participate in intensive training courses to master their expertise and have more flexible improvisation skills in all situations.

The most important thing is that the needs of people and investors are still very strong.

This is an opportunity for real estate enterprises and brokers to revive the market's confidence by improving the quality of the brokerage team as well as finding new and niche markets to develop instead of focusing on traditional markets as before.

Potential markets can be exploited, for example houses for rent, houses in the street, industrial rentals, focus on activation, attract international customers to local areas to buy and rent houses, or rent an apartment.

Thank Sir!