Categorized | International

Vietnamese Real Estate Market Struggles

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In just the last few months, Vietnam’s residential real estate market has essentially undergone a freefall. Just four years earlier, the real estate market looked as if would bring the nation great prosperity. Many people profited off flipping houses, as prices soared to incredible levels. However, all of that has changed in the last few months.

Prices have dropped to unprecedented lows, and the future looks to only get worse. Those that purchased homes at the beginning of the year with hopes of a quick and profitable sale have instead found it impossible to sell the property even at a loss.

While supply couldn’t keep up with demand in previous years, there are now countless vacant office buildings, and unfinished apartment complexes all over the nation. The number of bad debts associated with real estate is steadily rising.

Vietnam has been plagued with very high inflation, which is one of the factors contributing to the struggling real estate market. The real estate market in Vietnam is also facing tough times due to higher interest rates and stringent lending restrictions that have recently been put into place.

For many Vietnamese homeowners, foreclosure is becoming a much more likely scenario than anyone would have ever imagined. Those who had purchased second homes with the intentions to sell are strapped with underwater mortgages that they simply cannot afford.

Property developers, too, are struggling as a result of the bursting of the nation’s real estate bubble. Because homes are not selling, the majority of developers are not making any money. Property development firms have reported negative earnings this year after years of great profits.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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