Real Estate Inventories Increased Significantly in the 4th Quarter of 2020
Updated: Mar 11, 2021
The real estate inventory of listed companies increased significantly in the fourth quarter of 2020. Several projects were delayed due to the impact of the Covid-19 epidemic, legal bottlenecks, and the financial capacity of investors.
The financial report of Dat Xanh Group (DXG) shows that in 2020 the company achieved a profit of 2.89 trillion VND, only half of 2019, and a loss of 126 billion dong - the first loss of Dat Xanh since being listed in 2009.
The inventory of Dat Xanh increased by 51% to VND 10.2 trillion as of December 31, 2020, accounting for 55% of its total assets. For finished projects, it was mainly located in An Vien and Luxgarden projects, while the inventory of incomplete projects was estimated at 9.6 trillion VND. Many unfinished projects did not see any progress in construction in 2020, such as Tuyen Son, Hiep Binh Phuoc - Thu Duc, C1, Gem Riverside, and ST Moritz projects.
The financial report of An Gia Real Estate Development and Investment Joint Stock Company shows that by the end of December 2020, the real estate inventory increased by 120%, to VND 5.7 trillion, or 59% of the total company assets.
Its projects with a high inventory included The Song, The Westage, River Panorama 1, Panorama 2, Sky 89, and Signial projects.
Some examples of real estate inventories in real estate corporations are explained in more details in the table below:
According to Mr. Nguyen Van Dinh, Deputy General Secretary of the Vietnam Real Estate Association, in big cities like Ho Chi Minh and Hanoi, there were many projects with prices around 25 million/m2 but were pushed up to 30-40 million VND/m2. Consequently, sales were not high.
He cited figures showing that only 26.6% of real estate were sold in Hanoi in 2020, compared to 65.4% in 2019, 70.6% in 2018, and 60.7% in 2017.
Mr. Le Hoang Chau, President of Ho Chi Minh City Real Estate Association said that only considering the real estate inventory of listed companies cannot reflect the actual number in the market.
According to him, the increase in real estate inventory would weigh on businesses in particular and the economy generally.
However, Mr. Dinh said that many projects would be accelerated in 2021, creating more supply for the market when the legal framework is resolved and improve the financial capacity of investors.
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