Vietnam property prices are predicted to increase by ten percent this year as the real estate market continues to perform well. The Viet Nam Real Estate Association (VNREA) believes growth seen in the second half of 2020 will carry over into the new year.
“2021 will not have a risk of a virtual crisis or a bubble, but develop sustainably. Infrastructure projects with good business opportunities will become attractive forces. Real estate investment will spread to mountainous areas,” Nguyen Van Dinh, VNREA Deputy General Secretary, was quoted as saying by BizHub. “In addition, the bank interest rates that could be maintained at 2020’s levels will lead to stronger investment stimulus.”
According to VNREA, 60,000 new residential units came online last year, which was less than 2019. Meanwhile, the absorption rate in Ho Chi Minh City was more than 80 percent with prices also rising across multiple segments and locations. With demand remaining high and supply shrinking, Vietnam property prices are set to increase again in 2021.
“Real estate prices are a ‘marriage’ between supply and demand. While the supply is very scarce, foreign investors enter the market with billions of dollars in deals in Hanoi and Ho Chi Minh City. In terms of demand, individual investors pouring money into the market even exceeded 30 percent as mentioned in some studies,” Nguyen Tho Tuyen, BHS Group Chairman, told the website.
In order to avoid oversupply, the government implemented several regulations during the previous decade. However, with supply no longer able to meet demand, several homebuilders are hoping for changes that support the country’s growing real estate market.
Next year, the Ministry of Construction will focus on revising the Housing Law, and some decrees on old condominiums to facilitate businesses participating in the development of this type of housing,” Le Hoang Chau, Ho Chi Minh City Real Estate Association Chairman explained. “But we should also pay attention to legal risk prevention and control in the financial sector, as well as corporate credit.”
