Vietnam’s real estate developers have collective outstanding debts of at least VND 245,640 billion or US$9.7 billion, about 2.5 percent of Vietnam’s GDP, according to data collated by local media outlet Tuoi Tre. The data was collected from the financial reports of 80 of Vietnam’s biggest real estate developers but excludes its biggest real estate developer, VinGroup.
The publication goes on to point out that this is a 10 percent increase over the start of the year and a 52 percent increase over the end of 2022.
Of note, Vietnam’s real estate market is not in good shape and hasn’t been for almost two years now.
This is due to a number of factors but in short, the Evergrande crisis in China in 2022, led Vietnam to take a long hard look at its own real estate industry, through which it uncovered the misuse of investor funds, particularly those acquired through the bond market, and that a number of real estate firms were grossly over-leveraged. These revelations then went on to spook investors and consequently, from around October 2022, it became very challenging for real estate firms to access capital.
Though reports of an imminent recovery of the real estate sector have become common in local media, the reality is that these rising debt levels would suggest there is still a long way to go.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked