Which leverages help the real estate market in Vietnam spurts in the 2nd half of 2017?

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Which leverages help the real estate market in Vietnam spurts in the 2nd half of 2017?

Update: 17:04:21 27-06-2018Date Submitted : 16:25:52 27-06-2018

Many experts in the field have quite optimistic perspectives towards the market in Vietnam for the last months of 2017. The market is believed to positively and stably grow thanks to the "resilience" seen in the 1st half of the year.

Which leverages help the real estate market in Vietnam spurts in the 2nd half of 2017?
 
Which leverages help the real estate market in Vietnam spurts in the 2nd half of 2017?


The busy first half of 2017
 

Not like the forecast of many real estate agencies that the market will face with many challenges in 2017, it is surprising how the market has been so well performing for last 6 months. There are of course some fluctuations but it has been a sustainable trend of growth.
 

According to the statistics from the Ministry of Construction, in the first six months of the year, 8,200 newly-established enterprises were established. The number of enterprises in the real estate sector was 2,300. Thus, every day there are 13 enterprises in the field of real estate business established.
 

Particularly in Ho Chi Minh City, the economic report on the first 8 months of 2017 of the Planning and Investment Department of HCMC said that in the past eight months, HCM City has 26,614 newly established enterprises. Of which, the real estate business accounted for the highest proportion with 41.4%, the registered capital was up to 148.396 billion dongs.
 

Along with the number of businesses increasing strongly, the real estate market in the first half of the year also witnessed a massive amount of foreign capital flowing on.
 

Specifically, JLL report shows that the real estate market has attracted USD 19.2 billion of FDI, up 54.8% over the same period last year. According to the figures from the Planning and Investment Dept of Ho Chi Minh City, in the first 8 months of 2017, the city also attracted $ 788.19 million of FDI excluding contributed capital and share), of which Real estate business accounted for 15.4% ($ 122 million). In particular, the US has surpassed Singapore, topping the list of countries and territories investing in HCM City with $ 249.28 million of registered capital, accounting for 32.1 percent of total FDI registered in HCMC for 8 months.
 

According to real estate experts, the rise of newly established real estate businesses, combined with increased FDI attraction, has brought about the expectation of a big push to promote the development of HCMC real estate market in the last months of the year, helping to create new supply for the market.
 

In fact, the market has shown that although the supply of segments has increased sharply, the transaction rate has decreased compared to 2016 but the number of transactions has increased sharply over the same period. The land segment in both Hanoi and Ho Chi Minh City has a strong growth. Price of land in the west of Hanoi has a slight increase, in HCM City, land in the suburban districts such as Cu Chi and Can Gio has also recorded a significant increase. This fact somehow motivates investors to believe that, at least in the remaining months of the year, the market will not have much negative fluctuation.
 

HoREA's new report also said that although during 2016 and the first eight months of 2017, the property market has shown signs of slowing down, especially in the high-end segment (3/4-bedroom apartments and coastal condos), but looking at the whole picture, the market still retains quite a stable development.  

 

Good signs at the end of 2017
 

According to Assoc. Tran Kim Chung, the real estate market in the first 6 months as well as the last 6 months of the year has a general trend of stable development. There are a number of vibrant segments such as low-price condotel, office-tel, timeshare, small-area apartment, resort.etc. On the overall level, it has been stable.

 
Which leverages help the real estate market in Vietnam spurts in the 2nd half of 2017?


 

As HoREA forecasts, in the last months of 2017, the market will move in a positive direction, because the demand for housing in the market often increase during this time.
 

Especially, evaluating the real estate market from 2006 to present, HoREA said that in the period of 2016 - 2020, the real estate market is believed to have a strong restructuring, especially in product types to balance the difference of supply - demand.
 

Accordingly, the market will be shifted from the high-end segment to affordable apartments. This is a segment that has a huge demand and high liquidity.
 

Mr. Su Ngoc Khuong, Investment Director of Savills, said that there are more than 82,000 foreigners living and working in Vietnam, more than 4 million compatriots, Many of them have the interest in returning home and this demand will increase at the end of the year when the number of overseas compatriots returning to the country increases, this will be the base for the growth of the market.
 

According to Mr. Khuong, in the second half of 2017, the Vietnam real estate market will have a steady growth, in which two segments with the strongest development are residential apartments and resorts.
 

"Real estate prices are still slightly rising, and depend mainly on the location of the projects, which has not been widespread throughout the market and has accelerated over time. This market segment also depends on the general prosperity of the property market as well as other types of market", he said.
 

Another good news is that the real estate market is going to be even more open, many banks are enabling more rooms (the amount of stocks that foreign investors are allowed to buy - PV), credit and mortgage rates can decrease. This is justified by the fact that inflation is under control, while the liquidity of banks is high; The State Bank continues to buy US dollars to increase foreign exchange reserves. Moreover, the inter-bank mortgage rates have fallen to the lowest level since the beginning of the year, 0.6-1% from the end of June and down by 3-4% from the beginning of the year.
 

According to real estate experts, the decree to resolve bad debts by the government not only helps solve the bad debt of about 300 trillion dong, but also helps many real estate projects be guaranteed to be released, creating abundant sources for trading and transferring projects (M & A).
 

Mr. Dinh The Hien once said in the media that the real estate market in the second half of 2017 is still a channel for attracting individual investors, but will strongly diversify based on the financial capacity and needs of investors. - "The real estate market in the last 6 months of 2017 will not have a clear trend, the opportunity will come in each specific project and to those who have the financial capacity".