17:42 | 07/02/2016 Economy
(VEN) - The domestic real estate market recovered in every segment last year, promising a strong rebound this year.
Real demand revealed
Last year, the domestic real estate market provided real evidence of a recovery since 2013, with more positive development,increased transactions, decreased inventories and 5-10 percent price cuts in every segment.
According to the Vietnam National Real Estate Association (VNREA), 24,300 real estate product sales were completed during the first 11 months of 2015, nearly double the same period in the previous year. Hanoi recorded around 17,750 real estate transactions, an 80 percent increase; while Ho Chi Minh City recorded about 17,050 real estate transactions, a 92 percent increase.
According to Ho Chi Minh City Real Estate Association Chairman Le Hoang Chau, the city witnessed increasing recovery in houses, offices, industrial parks and clusters and resort segments. For example, up to VND1 billion, one to two bedroom apartments were developed in a sustainable manner to meet real local consumer need.
Former Deputy Minister of the Ministry of Natural Resources and Environment Dang Hung Vo said that the 2014 revised Real Estate Law and Housing Law proved effective in resolving problems with the real estate market. “We may rest assured, that we will not see real estate bubbles in the coming years,” he said.
Real estate market attracts foreign investors
Foreign real estate investors flocked to Vietnam last year. For example, the Japan-based Creed Group invested US$100 million in the Nam Bay Bay JSC and US$200 million in the An Gia Investment JSC and Malaysia-based Gamuda Land invested VND1.4 trillion in Celadon City.
As of the end of 2015, the domestic real estate market attracted US$2.32 billion in foreign direct investment (FDI), ranking third among the sectors most popular with FDI investors.
According to Stephen Wyatt, Country Head of Jones Lang LaSalle Vietnam, the domestic real estate market will thrive in the coming time, especially commercial real estate, when several free trade agreements take effect.
Managing director of Savills Vietnam Neil MacGregor was optimistic about the domestic real estate market saying Vietnam’s recovered real estate market is attractive to investors who want to take advantages. In the coming years, Vietnam will no doubt become a lucrative market for foreign investors.
Five of 10 Singapore-based investors are interested in Vietnam’s real estate market including Mapletree, Capital Land, Keppel Land, Vietnam Singapore Industrial Park and Sembcorp.