Total transactions during first seven months in Hanoi and HCMC double year-on-year.
A report on the real estate market in the first seven months of the year released by the Vietnam National Real Estate Association (VNREA) on August 25 showed that the property market is continuing to grow positively, particularly in Hanoi and Ho Chi Minh City. The total number of successful transactions during the first seven months in the two cities doubled against the same period last year.
According to VNREA, during the first seven months the real estate market continued to be vibrant and the confidence of homebuyers was being gradually restored. Other investment channels such as stocks, savings, and gold became increasingly less attractive, so many investors returned to property.
Transactions exceed 21,500
Hanoi’s real estate market in July saw 1,800 successful transactions, an increase of 3 per cent compared with June. In the first seven months there were total of 11,050 successful transactions in the capital.
The short-term real estate investment trend grew mainly because of strong liquidity in the apartment segment, especially luxury apartments. “However, it is important to note that this short-term investment trend makes the market become more vibrant but may also create a property bubble,” said Mr. Tran Ngoc Quang, General Secretary of VNREA.
Sales prices in new projects that have a prime location increased 4 to 6 per cent compared with the original price. Townhouses and villas in certain areas of the capital also rose slightly.
Meanwhile, in Ho Chi Minh City there were 1,750 successful transactions in July, increasing 3 per cent against June. In the first seven months the city saw 10,500 successful transactions, of which apartments with areas from 27 to 50 sq m and prices from VND750 million ($33,000) were very attractive to customers.
Although apartments meet the needs of the majority of urban residents, local authorities are concerned about overloading the city’s infrastructure. Movements in the market showed that housing prices increased slightly. Projects with great locations attracted a lot of customer interest.
The real estate market in the south therefore continues to witness a wave of new projects from mid to high-end being launched. Opportunities for homebuyers are available but investors are engaged in fierce competition.
Capital flowing to real estate
Each year there are about $12 billion worth of overseas remittances coming to Vietnam, of which 20 per cent flow into real estate, or approximately $2.4 billion.
Foreign direct investment (FDI) in real estate is increasing sharply. The Foreign Investment Agency under the Ministry of Planning and Investment said it ranks second among 17 areas attracting foreign investment in Vietnam.
In July the real estate sector welcomed over $1.225 billion from foreign investors.
Given the state of the real estate market in the first seven months, VNREA predicts that this year it will remain vibrant from a number of new projects being launched and other projects being offered for sale.