The Vietnamese property market in the new stage
Wealthy international investors are flocking in property market. And Vietnam is now widely seen as the next luxury property market hotspot, with a booming economy, coupled with laws that recently have made it easier for foreigners to purchase property.
As a result, there’s been a surge of high-end real estate developments in recent years. Because of strong demand, residential property prices are rising strongly as nominal house prices up 20.9% in HCMC, 4.8% in Hanoi during the year to the 1st quarter 2020.
In Ho Chi Minh City, apartment prices surged 22.7% in the 1st quarter 2019 from a year earlier, to an average of US $2,028 per square metre (sq. m.), according to Jones Lang La Salle Vietnam. Likewise in Hanoi, the average price of apartments rose by 6.8% y-o-y to US $1,407 per sq.m. in the 1st quarter 2019.
Sales have been greatly assisted by the Housing Law and Law on Real Estate Business (effective July 1, 2015), by the law on Sell and Transfer of Real Properties (subsequently fleshed out by Decree No 99 (effective December 10, 2015) and by Circular 19 (effective August 2016). Moreover, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), officially came into force in January 14, 2019; is also expected to attract more foreign investors. And maybe, Vietnam’s improving infrastructure is also a plus factor. “Vietnam focuses on investment in infrastructure including 2,000 km of new highways, subway systems in Hanoi and Ho Chi Minh City, and many airport expansion and construction projects”.
Outlook remains bullish.
The outlook for the Vietnamese housing market remains bullish due to continued strong economic growth, rapid urbanization growth, and the construction of several mega projects in major cities.
Overall, 2019 was a positive year for the real estate market, and we expect this performance to continue in 2020 in all segments. Vietnam is expected to continue growing this year, albeit at a much slower pace of 2.7%, amidst the coronavirus pandemic. Vietnam’s real estate race is becoming hotter than ever with the growing attention of many domestic and foreign investors, recording a record amount of investment in recent years.
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