Joining the Trans-Pacific Partnership (TPP), many experts see that Vietnam will have opportunity for its real estate market to take off.
The agreement must be ratified by lawmakers in 12 signatory countries before it officially takes effect. President Barack Obama is likely to face a debate and strong opposition to guarantee the ratification of the US Congress. It takes time for people to see the benefits of the Agreement, at least in America. But Jonathan Tizzard, Director of Research and Valuation of Cushman & Wakefield, said that the real estate market in Vietnam would benefit greatly from this agreement.
Leased premises, especially in industrial zones will become hot spots of the real estate market in the near future when the world's major corporations seeking investment opportunities in Vietnam. According to a report by Eurasia Group, Vietnam's GDP will increase by 11 percent and exports by 28 percent in 2025 when companies moved their production bases to Vietnam to take advantage of lower labour price.
In the first 9 months of 2015 in Vietnam, the total FDI reached US$17.15 billion, up 53.4 percent from the same period last year; FDI disbursement was estimated at US$9.64 billion. GDP in the first 9 months of 2015 was estimated to have increased by 6.5 percent compared to the same period last year, with growth in QIII reached 6.81 percent, its highest level in 5 years. Inflation continues to remain low, rising only 2.15 percent over the same period last year. These are very positive figures and within the context that the Government is making a commitment to opening the economy and relaxing room for investors to invest in state-owned enterprises because the SOEs account for about a third of Vietnam's GDP and their inefficient operations have restrained the growth of the economy and increased the national debt.
Elimination of high tariffs will be the "win-lose" game to the domestic industry in improving its competitive position compared to foreign companies, which forces them to work more efficiently and thus bringing effectiveness to the whole economy.
The property experts have same assessment that the demand for industrial real estate will continue to increase. The number of people able to buy houses, expensive apartments will increase, not to mention shopping needs and other related items that the foreign experts and people with higher incomes would be interested in. The demand for international quality office will also increase as some industrial groups seek office space in the city centre. The speed of urbanisation in small and big cities will continue to make agricultural workers come to the industrial park to work. In addition, logistics sector which will continue to grow in the next decade in Vietnam will create favourable conditions for the comprehensive development of infrastructure such as roads, railways, seaports and airports.
Opportunities always come with challenges; the biggest challenge is the goal of social justice, which benefits the people, must be of primary concern. The second challenge is the aim to modernise the country accompanied by the environmental protection and sustainable development.
Luong Tuan
Vietnamese
