Vietnam real estate, three growing and stable markets
According to VietNamNet Bridge, Vietnam's real estate market is expected to continue growing and remain stable in three markets: clean and eco-friendly real estate market, real estate market in the resort & tourism sector, and residential & apartment market.
A strong rise in the residential sector will lead the real estate market this year.
The market expanded significantly in 2018 as well. Swift and stringent regulations to control market overheating, transparent policies, and reliable investment capital flows have stabilized the real estate market, and continued to perform well this year.
expected to sustain the market.
The government's economic targets of 6.6-6.8% GDP growth, less than 4% inflation and 14% credit growth will provide stable support for the real estate market development.
Credit rating agency Vietnam Report predicts three prominent trends in the market, including green work, resort real estate and residential project development.
Clean and Eco! [Real estate in Vietnam]
Regarding eco-friendly real estate, the number of construction projects that meet Leed certification*1 is still small, and represents only a small portion of all construction projects. However, Vietnamese citizens tend to spend more money on safe, comfortable and smart living spaces. A clean and eco-friendly real estate market is expected to become a major trend in the future.
Resort & Tourism [Real Estate in Vietnam]
The resorts and tourism real estate market segment has cooled compared to last year, but analysts still believe there are investment opportunities.
According to the latest BCG*2 report, Vietnam collected $8.3 billion from overseas travelers in 2017, trailing Indonesia's $12.6 billion, Singapore's $18.4 billion and Thailand's $52.5 billion. However, the number of foreign tourists to Vietnam soared in 2018, reaching an unprecedented record of 3 million in the first two months of 2019.
Meanwhile, the development of high-end entertainment complexes, shopping centers and resorts has not kept up with the needs of the tourism market. As such, investors will continue to develop shops and condotels.
Housing and condominium market [Real estate in Vietnam]
According to the CIA World Factbook*3, Vietnam's urbanization rate was 35% in 2017, but the pace of urbanization was 2.6%, the highest in Southeast Asia.
The increasing number of foreign engineers, staff and their families residing in Vietnam due to international projects funded by foreign investors has dramatically increased demand for housing and apartments in big cities.
HSBC Vietnam CEO Pham Hong Hai predicted that the demand for housing among low- and middle-income households will continue to grow as a result of the migration of labor from rural to urban areas. The relatively affordable apartment segment, which is in high demand from low- and middle-income households, leads the market. As for luxury apartments, prices in Vietnam are also lower than in other countries in the region, which is expected to attract investment by foreign investors.
*1 LEED certification
Currently, the certification system that evaluates the environmental performance of buildings is the most widely recognized internationally. LEED (Leadership in Energy and Environment Design) LEED is certified by the US Green Building Council, a non-profit private organization.
*2 BGC
Abbreviation for Boston Consulting Group. Known as a global strategy consulting firm with 16,000 staff and over 90 offices in 50 countries around the world. Together with McKinsey & Company, it is one of the world's top strategy consultants.
*3 CIA
Central Intelligence Agency (Chuoujohokyoku, English: Central Intelligence Agency, abbreviation: CIA) is a United States intelligence agency that conducts intelligence activities abroad. It is an agency under the direct control of the President of the United States.
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