Real Estate Market Keeps Growing in 2016

According to property experts, the clearest ground for the viewpoint is the positive economic recovery of Vietnam, with growth at nearly 6.7 per cent in 2016. Besides, positive changes in the amended Housing Law like allowing foreigners and overseas Vietnamese to own real estate in Vietnam and the effect of amended Real Estate Business Law also affect the trend.

Marc Townsend, Managing Director of CBRE Vietnam, said that commercial and housing real estate market in Vietnam has positively recovered the world financial crisis in 2008. With strong developments in 2016, Vietnam probably will become one of five hottest markets in Asia.

He said forecast that the real estate market in Hanoi and HCM City will witness the reappearance of affordable urban areas.

By 2016, the commercial real estate segment still keeps the pace of growth and the office segment is still focuses in both Hanoi and HCM City. CBRE added that vacation property is still very active since Vietnam is emerging as an interesting tourism destination while industrial property is expected to develop strongly when big multinational organisations expand production bases in Vietnam to grasp advantages generated by Trans-Pacific Partnership (TPP) and other trade advantages.

Mr Nguyen Duc Thanh, Chairman of the Central Institute for Economic Management (CIEM), said the real estate market is being benefited from positive macroeconomic factors. First of all, two real estate laws, namely the Law on Real Estate Business Law 2014 and the Law on Housing 2014, provided a lot of market development support policies.

He stressed that "Vietnam is facing many favourable opportunities, particularly TPP-induced FDI flows, which may be channelled into real estate sector. Other factors are currently steady economic growth and high people's savings. This is an opportunity for the property market to catch money from home buyers and consumers.”

He said house prices in Hanoi and HCM City relative to other cities in the region like Singapore, Malaysia and China are still lower. So, the market still has more development opportunities. In fact, the demand for real estate in Vietnam is still very high in many segments and this is the ground for their remark that the real estate bubble is unlikely to occur in the near term although prices will continue to rise.

Representatives from some companies like Phu Quoc Investment and Development Joint Stock Company and McKinsey&Company Vietnam introduced some real estate investment models suitable to Vietnam’s upcoming conditions. These are important directional contributions to the development of the property market.

Mr Vu Van Phan, Director of the Department of Housing and Real Estate Market Administration under the Ministry of Construction, said the real estate market in Vietnam is growing in the right direction and segments will have different development trends but the whole market growth will be mild in general.

In response to remarks on strong impacts on the upcoming property market development caused by Circular 36, he added that Circular 36 does not intend to squeeze capital flows into the property market but aims to fix existing problems for healthy market development.

Source: vccinews