By June 20, about 20 businesses had missed May bond repayments exceeding VND 650 billion or US$26 million in interest and nearly VND 8.2 trillion or US$32.8 million in principle. Most of these companies were in the real estate sector, according to VN Express.
This fits with a broader narrative around the struggles of managing capital in the sector in recent years,.
For example, foreign investment has declined. Vietnam’s real estate sector witnessed a steep fall in foreign funds flowing into the sector in 2023. Inflows reached just US$982 million a substantial–46 percent–year-on-year drop compared to the US$1.8 billion recorded in 2022.
Furthermore, consumer prepayments for residential real estate properties have also dried up. Vingroup, Vietnam’s biggest real estate developer, had about US$2.77 billion in prepayments on its books in the first quarter of 2023. However, by year-end, that number had shrunk by 36 percent, to just US $1.76 billion.
This is part of much bigger challenges facing real estate in Vietnam that have been ongoing for years. This latest tranche of delayed bond payments would suggest it may go on a while longer too.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked