Hanoi (VNA)💎 – The number of new firms established in the January-July period, at 89,600, was up 0.2% from the same period last year, but their total registered capital reduced by 17.1% to 834 trillion VND (35.2 billion USD), reported the General Statistics Office.

The real estate sector saw a strong reduction in the numberof newly-established firms, with 2,622 ones in the past seven months, down56.2% annually. Meanwhile, 756 firms in the sector were dissolved during the period, marking a year-on-year riseof 17%. Experts believed that these figures accurately reflect thecurrent challenging situation in the real estate market. The period of its peakgrowth has passed while difficulties are expected to continue, leading to anincrease in the number of businesses that will have to exit the market in thenear future. Survey data from the Vietnam Association of Realtors (VARS)indicated that if the market situation continues to be challenging, up to 23%of real estate companies could only sustain their operations until the end of the thirdquarter, and only about 43% can survive till later this year. VARS Chairman Nguyen Van Dinh said since May 2022, themarket has experienced difficulties due to the impact of the pandemic and market growthcycle, as well as the economic slowdown. A series of tightenedcredit policies, corporate bonds and lingering legal issues in projectimplementation have also contributed to the challenges. Interest rates have remained high since late 2022 and despite a downward trend from the beginning of this year, they still remain at alevel that is burdensome for businesses, he said. The high financial cost pressure, coupled with "scarce"cash flow due to unsold inventory, difficulties in raising capital throughbonds, and insufficient creditworthiness for loans, has weakened the health ofreal estate companies. The prolonged state of difficulty not only affectsplayers in the property market but also leads to stagnation in various relatedindustries. GeneralDirector of Phuc Hung Real Estate Services JSC Nguyen Duy Thanh, however, said the market has shownsome positive signals due to management policies, including the ongoing finalising process of relevant real estate market-related laws, such as the Real Estate BusinessLaw, Housing Law and Land Law. Moreover, there is a consistent commitment tolower lending rates and expand the credit room to 14% for the entire bankingsystem./.