Revitalizing Vietnam Property Market

To begin with, the office market, Ho Chi Minh City particularly, witnessed a consistently price dropping. In comparison with the peak time in 2008, the office renting price in the Vietnam Southern city has decreased more than 45 percent. In the next three years, at least an amount of one million square meters is expected to go on stock, putting landlords under much more pressure to lower the price. The year 2013 then is the year for customers to take full advantage of the oversupply market and enjoy much more brand new and hi-end skyscrapers.

 

On the residential market, grade B & C apartments dominate both HCMC and Hanoi in terms of availability while poor sales performance recorded on new condo projects. Meanwhile, re-sale market and landed property is stable. Developers are looking for new ways to dispose of property including subdividing or apartment rentals etc. Therefore 2013 is expected to remain a buyer’s market and the downward pricing trend is will continue.

 

In the retail market, 1,500 new retail projects will be launching in the next 7 years across Vietnam. In 2012, Vietnam went off the list of 30 most attractive retail markets in the world (A.T Kearney). However Vietnam is still attractive to international retailers. Demand for retail space in the CBD is expected to remain high. However, due to the land limitation and high land price, the majority of future stock will be concentrated in the suburban area. 

 

Commenting on the government’s recent economic and monetary issue, General Director of Cushman and Wakefield in Vietnam - Mr Chris Brown said at the seminar entitled “Revitalizing Vietnam’s property market” organised in 13th June, 2013: “The VND30 trillion credit package bail out policy would assist developers being thirsty for capital and encourage them develop social houses for low-income people. And vice versa, low-income people will have the chance to buy an apartment, which then help increase total market demand and leverage the frozen property market” However Chris also emphasis that there would be difficulty in procedure as it will not be easy to carry out. Besides, it is not sure about the interest rate after three years of the loan, so the low-income buyers may be unable to pay the loan.