Real Estate Market: All-Sided Development

Given the past growth and the most active trend in the last months of the year, property deals in 2015 are expected to double from 2015. The conclusion of the Trans-Pacific Partnership (TPP) was hoped to drive up the property market this year and beyond. This means that Vietnam is likely to become new production base of the world in the future as its advantages of high productivity and low labour costs.

 

The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI) said Vietnam licensed 1,432 foreign direct investment (FDI) projects with a total registered capital of US$11.03 billion in the year to September 20, up 44.5 percent over the same period of 2014. Combined with the additional investment capital registered by existing projects, the country attracted US$17.15 billion in the first nine months, up 53.4 percent from the same period of 2014. Notably, the real estate sector ranked third in FDI value received, totalling US$1.81 billion from 19 fresh projects and seven existing projects.

 

There is a significant interrelation between investment flows with the property market as investment projects will require logistics workshops, warehouses, offices, retail spaces and apartments for rent. Particularly, industrial parks near to ports, airports and developed infrastructure will be more appealing to foreign investors. Besides, the demand for world-class offices will also increase for as foreign industrial corporations seek office spaces in downtowns. This means that more people can afford expensive accommodations. As Vietnam also allows foreigners to possess houses, the demand for upmarket adobes is forecast to be shaped.

 

Strengthened foreign and domestic forces provide a ground for investors to trust in the market prospect. However, in general, TPP impacts on the real estate market are still in the future, depending on how Vietnam will grasp and realise these opportunities.