Stable growth, an increase in incomes and high demand for real estate products have together created favourable opportunities for overseas investors in Vietnam’s real estate, a Ho Chi Minh City conference heard last week.
Speaking at the Vietnam Real Estate Symposium 2018 hosted by the Australia Chamber of Commerce in Vietnam (Auscham), chairman of the Vietnam National Real Estate Association Nguyen Tran Nam said that many domestic developers own large land funds and, due to current credit tightening that reduces the possibility of bank loans, they should seek out foreign developers to co-operate on schemes.
“It is high time for foreign developers join projects in Vietnam because the current credit tightening from the government reduces the finance flow from domestic developers, but this should be a good opportunity for foreign developers to jump into the sector and acquire projects,” Nam said.
Nam confirmed that the property market remains strong, attracting increasing foreign investment while the stockpile has been reducing.
According to a survey carried out by a Thai company, it is normal that products from particular ventures in Vietnam could be sold out within two years, and especially for affordable projects it can take only six months for developers to sell out of their pocket.
Nam is impressed with the development of tourism and related properties as well. Vietnam welcomed more than 13 million international visitors in 2017 and this year is estimated to reach 15 million. There is a huge demand for tourist accommodation, but room numbers are still being left behind.
Nguyen Trong Thuc, senior manager at CBRE Vietnam, also looked favourably on the fast-paced development of the tourism sector in the country. “Tourist hotpots are developing to meet with the increasing demand of accommodation. Danang and Nha Trang are the leading destinations for holidays and Phu Quoc and Van Don are increasing their names on the tourist map also,” Thuc said.
“The Vietnamese tourism industry has much room for development, compared with other neighbouring countries such as Thailand,” he added.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, highlighted that the real estate sector in 2019 and beyond will drive demand towards industrial property, homes for lease and tourism accommodation.
As a foreign investor, Caleb Lau, general director of Hongkong Land, said that two real estate segments which are now highly sought-after by foreign investors are commercial and housing projects. “The open Housing Law has driven interest from many foreign investors, especially those from China,” Lau said.
On a legal perspective Dao Nguyen, managing partner of DN Legal, said that the Vietnamese government has improved the legal process and that developers are offered a more efficient system.
“Efforts from the government in legal completion have been proven across a range of regulations and decrees in the real estate sector, and are encouraging developers and investors to do business in Vietnam,” Nguyen said.
He further detailed that some legal regulations are easing the process for foreign individuals and organisations to purchase properties in Vietnam for living and re-leasing, and for overseas financiers to buy part or entire projects before completion.
The Auscham symposium, in collaboration with other business chambers, also discussed the latest developments in Vietnam’s property sector, market insights, attracting domestic and overseas investors, and upgrades on law and tax changes. The conference also catered for networking opportunities with key parties and well-known figures in the real estate industry, featuring active participants from both local and foreign developers and investors.