Fears of a property bubble in Vietnam are squashed.
Vietnam’s buoyant property market is subject to a lot of conversation. The question crops up often if a bubble is on the horizon, but CBRE are adamant that this is far from the case.
The market has become more balanced. The number of mid-end properties being launched has increased. Plus the market has welcomed a variety of buyers. Bought for their own use and also investors from overseas and local buyers. These facts alone illustrate the interest that Vietnam’s property market has generated and signifies its strengths.
The government’s intentions to keep the market in check are working. Aiming to protect purchasers and also kick start the lower end segment. Simultaneously they are curbing property bubbles at the higher end segment. All of which paints a positive look for the future.
There is significant supply to the market, however this maintains prices to avoid a bubble. Interestingly there is a shift in development locations. Landed property which consists of townhouses and villas are moving from the CBD as land is increasing in prices particularly in District 9. The south and the east are becoming popular spots with many developers building ready completed homes as opposed to selling just land plots. This pattern of movement is expected to continue as developers spread into other districts. There is a thirst for this type of property in Vietnam and more townships are expected on the horizon.
Looking ahead, more of the same is anticipated. The luxury segment will likely to experience an increase of between 5 and 10 percent for properties situated in prime locations. However, prices will be stable for the lower end of the market as affordability is vital to the success of these projects as they target end-users so do not experience the supply and demand mechanism that pushes up prices.