Vietnam’s leadership is under pressure to introduce reforms to reinvigorate the property sector after leverage restrictions designed to limit risks to the economy and an anti-graft crackdown last year hobbled developers and sent bond prices tumbling.
International bonds issued by the country’s largest property developers have plunged to trade at cents on the dollar after the government introduced new reporting requirements, tightened access to credit and made high-profile arrests of property tycoons on charges including bond market fraud.
Vietnam’s property woes mirror those in China, where the sector has been roiled by a liquidity crisis for more than two years after authorities moved to rein in leverage, triggering a series of high-profile developer defaults. Evergrande, the world’s most indebted property developer, filed for bankruptcy protection in the US this month.