Domestic real estate to see ‘hot’ development

The domestic property market this year would see “hot” development as Vietnam would be one of five best prospective markets in the Asian region, experts said.

Marc Townsend, CBRE Vietnam Director told the “Real Estate Conference 2016: New Hopes, New Challenges” held in Hanoi on May 17 that the country’s real estate market had gradually recovered from the global financial crisis in 2008.

He said that selling prices of high end apartments in Hanoi and HCM City would see strong growth amid increasing land prices.

Buildings and property projects around My Dinh - Cau Dien in Hanoi. Photo: enternews.vn

CBRE forecast that the two big cities would see development in urban areas. The middle housing segment would dominate the market with average price of VND 1 billion (USD 44,984).

In the year 2016, the office segment would be the main target. Hanoi and HCM City would still draw attention and attract foreign direct investment when Trans-Pacific Partnership (TPP) comes into effect.

He also added that the resort segment would be crowded as Vietnam had emerged as one of the new destinations for resort development while industrial real estate was also expected to strongly develop when multinational groups expand their operations in Vietnam to take advantage of the TPP.

Vietnam should increase transparency in approving projects and tighten management to attract more investors, he added.

Sharing the ideas, Nguyen Duc Thanh, director of the Vietnam Institute for Economic and Policy Research, said that the property market had been promoted by several positive macroeconomics factors. The Law on Housing 2014 and Real Estate Trading Law 2014 had provided loose policies to spur the market’s development.

“In addition, effect of the TPP would ensure higher FDI inflows into Vietnam, of which a major part would enter the estate market. The stable economic growth and increasing savings among residents would be an opportunity for the market to receive a big investment from home buyers and investors,” Thanh said.

He said the housing prices in Hanoi and HCM City would be cheaper than countries such as China and Singapore. The estate market therefore would still have potential for further development.

“Bubbles in the property market will not be seen at the moment,” he said.

Vu Van Phan, head of the Ministry of Construction’s Housing and Real Estate Market Management Department, said the market would maintain its stable development and slight growth rate.

Phan said Decree 36 would reduce shortcomings for more healthy development but not tighten credit in the market.

“Moreover, the Law on Real Estate Trading is already in effect for the year. We have to welcome opinions to better support property developers,” he added.