Although under great pressure from Covid-19, foreign investment capital (FDI) into Vietnam continued to grow in the first 6 months of 2022 and real estate ranked second. This shows that Vietnam’s real estate market has stable growth and is still an attractive “piece of cake” for foreign businesses.
This is a statement made by Savills Vietnam in the latest report on the prospect of attracting FDI in the real estate sector.
Mr. Do Duy Thanh, Manager of Savills Hanoi Investment Advisory Department, assessed that real estate has always been a key economic sector with stable and sustainable growth in Vietnam. Not only industrial real estate but also housing, resort, health care… are also magnets to attract foreign investors.
Vietnam’s real estate market is still attractive to FDI inflows. Photo: VD
With favorable investment conditions, Savills believes that the real estate market will inevitably become an attractive “piece of cake” for foreign businesses. Of which, two-thirds of FDI enterprises participating in Vietnam’s real estate sector are large-scale enterprises with increasingly diversified and better quality forms, especially industrial real estate is increasingly attracting capital.
According to this unit, the increasing number of middle and upper-class customers, coupled with the rapid urbanization process in big cities will continue to boost the demand for housing in Vietnam. Along with that, despite being hit the hardest by the pandemic, resort real estate is still a segment where smart investors can look for opportunities to enter the market, especially in Phu Quoc, Nha Trang, Phan Thiet…
In addition, the emergence of the healthcare real estate segment, which is still very new in Vietnam, will also be a great opportunity for investors with the vision and ability to seize opportunities.
Moreover, foreign investors are also paying special attention to residential and office real estate. This trend comes from increasing customer demand while the price is still reasonable when comparing big cities like Hanoi and Ho Chi Minh City with neighboring markets like Singapore, Shanghai, Shenzhen…
Besides opportunities, Savills also pointed out that FDI inflows into the real estate market also face many difficulties and challenges. Specifically, the amount of FDI registered to the market year by year was not actually disbursed as promised, due to many factors related to the legal system surrounding the project development process. This leads to a delay in implementation. For example, a new type of real estate is attracting a lot of attention from investors such as condotels and officetels, but the legal regulations for these types have not been fully and promptly issued.
Accordingly, in order to solve the above problems, when entering the market, many foreign investors will often want to cooperate in the form of a joint venture with Vietnamese investors for assistance in the process of handling legal procedures for project development. However, not always the two businesses have a common voice.
This unit said that a more macro problem is that currently, projects with good quality are gradually becoming scarce and less public. Therefore, ensuring the legal process and progress during project development should be a top priority.
As for the management agency, the legal regulations for new types of real estate should be reviewed, foreign investment policy should also be timely adjusted to suit and keep up with the fluctuations of the global economy. In addition, the quality of traffic and infrastructure also needs to be focused on improving.
@ Saigon Times
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Source: Vietnam Insider