Investors who have partly paid for properties are selling it back to the developer as they are neither able to keep paying the mortgage nor able to find a buyer.
Having paid nearly VND800 million ($34,100) for an apartment in Ho Chi Minh City’s Binh Thanh District, Ngan has decided to sell it back to the developer as the development of the project has been stalled due to administrative blockages.
Although she decided to liquidate the purchase contract to get her cash back last November, she has still not received her money, as the company has apologetically told her that it’s facing a cash crunch and cannot pay her yet.
“They promised they would pay me in February,” she said, “but I am worried that the company will not pay me back.”
Nen, who was in the process of buying an apartment in Binh Duong Province, near Thu Duc City, last month decided to liquidate his purchase contract after having paid VND600 million.
But it has been over a month and Nen still has not received the cash he was promised.
“I saw many other customers getting angry and throwing water at the developer’s staff for not paying them back the cash.”
VnExpress has learned that among five property projects that are under construction in HCMC and nearby suburbs, the number of buyers who are liquidating their investment has increased.
Some projects have less than 30 owners as others have already liquidated their contracts. Most investors have not received their money back.
A sales director of a property developer in eastern HCMC said that by the end of last month and early this month, the number of investors who wanted to sell their property back to the company had surged by 30% from the third quarter last year.
The company, however, has been struggling to pay back the buyers as it is facing a cash crunch.
The director, who asked not be identified, said that most people bought early with a mortgage and hoped that they would be able to sell it quickly for profit.
But there is low demand during at this time, and investors are starting to feel the pain of loan interest.
Pham Lam, deputy chairman of the Vietnam Real Estate Association, said that part of the reason for the problem is delays in acquiring necessary permits to develop projects.
“Buyers themselves are struggling to pay monthly mortgage amid high bank interest rates,” said Lam.
The trend could continue this year as it will take time for businesses to arrange cash to pay back their customers, he added.
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