HCM City authorities said the city would continue this month to focus on addressing problems facing real estate firms as part of efforts to have the sector recover by the end of the year.

Speaking at a meeting on Friday, Phan Van Mai, chairman of the municipal People’s Committee, said the real estate sector, which contributes 11 per cent to the nation’s GDP, has organic relationships with many other fields and creates many jobs.

Since the fourth quarter of last year, the sector has shown signs of difficulties, with fewer transactions being conducted compared to the beginning of 2022, he said.

“The problems will likely persist until the middle of 2023,” he added.

Mai has assigned Bui Xuan Cuong, deputy chairman of the People’s Committee, to work with the task force set up recently by the Government to address the hurdles faced by the sector.

Priority must be given to addressing the problems of 116 real estate projects that face mostly legal bottlenecks, he said.

He has also instructed the departments of Construction, Natural Resources and Environment, Planning and Investment, and Planning and Architecture to work with the HCM City Real Estate Association and real estate developers on the issue.

The Department of Planning and Investment has been asked to propose measures to speed up investment procedures by the end of March.

Le Hoang Chau, chairman of HCM City Real Estate Association, said the challenges in the real estate sector are expected to last until next year.

Corporate bond-related issues, including ongoing investigations into wrongdoings during issuances, are also impacting capital flows, he said.

A huge amount of expiring corporate bonds this year and next year are putting great pressure on issuers, who are mostly property businesses, he added.

He recommended large real estate firms roll over debt, sell part of their projects, undertake M&A, and get new investors with strong financial capacity to join them, according to Chau.

The number of local property developers going bankrupt rose 38.7 per cent last year due to insufficient cash flows and high raw material costs, according to the Ministry of Construction.

Experts said investment and construction bottlenecks have remained unresolved for years, causing long delays.

They said it was necessary to streamline administrative procedures, especially related to payment of land use fees, adjustment of land use rights and licences.

They have called for diversifying housing products, especially by increasing affordable housing, and addressing the mismatch between supply and demand.

Speaking at the event, Le Thi Huynh Mai, director of the Department of Planning and Investment, said the city index of industrial production (IIP) increased by 12.7 per cent in the first two months.

The city received more than 319,000 international tourists during the period, up 100 per cent year-on-year. Its tourism revenue increased by 115.8 per cent, she said.

The number of newly established enterprises increased by 13.1 per cent, she added.

Its total budget revenue was estimated at more than VND93 trillion, or 19.83 per cent of the year’s target and an increase of 5.95 per cent year-on-year, according to Mai.

Total retail sales of consumer goods and services increased by 6.1 per cent. Its exports increased by 3 per cent year-on-year. — VNS