What gives property in Vietnam their values? Let’s find out the top 4 influencers in this article with us!
Real estate prices vary across Vietnam as they do in other countries. To know exactly what affects the selling price, you’ll need to examine a wide host of factors. We’ll give you a quick overview about the Vietnamese housing market, and the potential drivers leading to the high prices.
Let’s get started!
Top 4 factors that affect the prices of Vietnamese homes
Location
Each property has a unique location. Therefore, most investors prefer real estate in city centers or commercial zones with infrastructure development, traffic flow, public works, and residential districts. As a result, a house on a main street near the city center might cost tens of thousands of dollars more than a same-sized house in a back alley a few kilometers away.
Nature and environment
Both the property and the surrounding area have an impact on the selling price. Consider the height of the property, the sea level in the region, if it is in a flood or drought zone, and whether the soil is appropriate for high-rise buildings, for example. The surrounding living environment of the property is also significant; if the house is located in a dirty, noisy location, the price may fall.
Property type
Because real estate is such a complex commodity, we may assess its value from a variety of perspectives. Apartments and townhouses will be more expensive if they are close to schools, hospitals, and supermarkets. Commercial real estate, such as offices, will be more expensive if it is located in the administrative center or a functional area.
Supply and demand
Residential property prices in Vietnam continue to climb. However, because of the Covid epidemic, both demand and supply are at an all-time low. In the third quarter of 2021, the primary stock of flats in Ho Chi Minh City fell by 70% year on year, and by 27% in Hanoi (Savills).
According to the Ho Chi Minh City Real Estate Association (HoREA), 70% of apartment production in 2020 will be in the high-end group, with only 163 units in the inexpensive segment, accounting for 1% of the total number entering the primary market.
Nevertheless, this doesn’t lower the price on most real estate products.
How positive is the Vietnamese market?
PropertyGuru conducted a Consumer Sentiment Survey earlier this year. Despite the fact that 52 percent of respondents felt that property prices in Vietnam are too high, many remain optimistic about the price growth. According to the poll, up to 89 percent of respondents anticipate price increases over the next five years, with 31 percent anticipating increases of more than 10%.
It can be seen that Vietnamese’ income levels are not too high compared to other countries. Yet, they remain positive about the future of real estate ahead: Most Vietnamese plan to buy a home for actual use, not simply an investment.
Conclusion
Navigating through the Vietnamese home-selling market remains complex. This is why we encourage you, as foreign buyers, to seek alternative solutions instead of handling the process all on your own.
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Source: Vietnam Insider