Historically speaking, developers have focused most of their efforts on Hanoi and Ho Chi Minh City where demand has been strongest. However, things have started to shift with more homebuilders now turning their attention to areas beyond Vietnam’s two largest cities.
Nguyen Van Dinh, Vietnam Real Estate Association (VNREA), Deputy General Secretary, told Vietnam Plus that a wave of new real estate investment in lesser known provinces has picked up significantly during the past few years. The main reason for the shift all boils down to profitability.
Land has become scarcer in both Hanoi and Ho Chi Minh City. This has caused land prices to soar, forcing developers to raise asking prices at new launches in order to cover the costs.
“As for apartment products, Hanoi is not profitable because the apartment price has reached its peak. Currently, buyers mainly have demand for accommodation, not for business,” Dinh stated.
Many developers decided it made more sense to launch developments in other areas of the country where land prices are lower and there is more room for profitability. Additionally, many of these provinces have open policies designed to attract investors.
“This was why new markets see strong economic development, including advantages in industrial development and the tourism sector. Excluding areas that have developed tourism real estate, such as Da Nang, Nha Trang and Quang Ninh, the new markets for the tourism industry are the localities that in recent years have taken advantage of beautiful landscapes and good natural conditions, such as Thanh Hoa, Nghe An, Quang Binh and Binh Dinh. We agree that these are the addresses that see new markets,” Dinh pointed out.
Binh Dinh province has focused on improving transport infrastructure which has helped it attract more investment in the property sector. Investment in regional airports, seaports and roads has allowed the province to bring in more visitors with developers following suit.