The growing middle class is contributing to the growing real estate and aviation industries.
As the economy continues to grow as does the middle class. Armed with healthier bank balances to spend. This tier of the population are also helping to contribute to the growth in the aviation sector in addition to having more money to spend on property.
According to data from real estate firm Savills, the average expenditure on housing is anywhere between 30 and 40 percent of household incomes. Last year USD 6 billion worth of apartments were sold in Hanoi and Ho Chi Minh City. This illustrates the sheer strength of the property market for the economy.
Plus recent figures from the Ministry of Planning and Investment reveal that for the first half of this year property ranks number five in the popularity stakes for foreign direct investment. If compared to the same period of 2016, there has been a hike in injected capital by just over 42 percent.
Many believe overseas investors as well as the local middle classes are contributing to this increase in numbers. The government has made it easier for those wishing to own property in Vietnam through more streamlined procedures. This adds to country’s appeal as a place to buy property when coupled with the profitable potential.
Increase in aviation
Aside from property, one market that is also booming is aviation. Boasted by the blossoming of budget airlines, last year Vietnam saw an increase in passenger numbers by 30 percent. The increased spending power of the middle classes are ensuring this growth. Plus the rise in tourism. Both making the country the fastest growing aviation market globally.
There are 700 flights daily between Ho Chi Minh City and Hanoi making this the seventh busiest air route worldwide. As a result airports are running beyond capacity. With no slowdown expected anytime soon the congestion is causing many flights to be cancelled as the airports cannot cope.
With spending from the middle classes set to continue there are plans to increase airport numbers and passenger numbers. Subsequently the aviation sector is being earmarked for investment. More money is expected to be poured into this industry as Vietnam continues its growth as the next Asian Tiger.