Vietnam’s real estate market 2021: Continue to attract foreign capital

Minh Hoàng
April 24, 2021

– A study from the end of the fourth quarter of 2020 by Savills Global stated many international real estate investment experts, showing that although global investment capital poured into real estate decreased by 28% compared to the same period in 2019, Not all real estate sectors are adversely affected.

Tòa nhà Sunwah tại trung tâm TP. HCM đang thuộc sở hữu của một nhà đầu tư nước ngoài. (Ảnh: Bảo Lan)
Sunwah building in the city center. HCM is owned by a foreign investor. (Photo: Bao Lan)

The real estate market is always attractive

With the real estate market in Vietnam, Savills research shows that the mayor of office, the housing market and the logistics sector continue to be the top three areas attracting foreign investors. Specifically, the industrial real estate and housing sectors decreased slightly in volume, but accounted for an impressive market share of 21% and 28% of total investment sources, respectively. Meanwhile, the office market stood firm with a 33% market share.

Another data from Preqin – a company specializing in providing financial data, also statistics the long-term attractiveness of the real estate sector and the number of funds aiming to pour capital into this field has yet to show signs of stopping. According to Preqin, by the beginning of the fourth quarter of 2020, there were more than 1,000 funds participating in the real estate market in Vietnam, double the figure in January 2016. The funds are currently targeting investments of nearly $ 300 billion, with growth continuing to progress through 2021.

According to the Director of Cross-Border Investment at Savills Rasheed Hassan, the adverse effects of Covid-19 cannot prevent investors and financial funds from targeting target markets and areas of strong attraction. capital and Vietnam’s real estate market are no exception. In which, the fields including: Logistics, industrial real estate continue to be the priority choices in the next 12 months. Particularly in the office market, Rasheed Hassan said, currently due to the social gap, it will definitely return to active activities.

According to the Director, the reasons why many investors and the International Financial Fund are targeting the Vietnamese market are: good epidemic control, stable political-security situation, macroeconomics. is under control, the people’s social life has been improved compared to a decade ago.

Along with that is the Government’s Resolution 02 “On continuing to perform the tasks and solutions mainly to improve the business environment and improve national competitiveness in 2021” was issued. Therefore, right from the first months of 2021, the Vietnamese market, especially the real estate market, has been targeted by many international investors and the Financial Fund, making this Southeast Asian country an economic environment. a favorable business for foreign businesses and a bright spot in the regional economy.

Thị phần đầu tư của các mảng trong lĩnh vực bất động sản năm 2020 theo phân tích của Savill toàn cầu. (Ảnh: Savills)
The market share of the investment in the real estate sector in 2020 according to Savill global analysis. (Photo: Savills)

Need the right policy
However, a recent Savill report also pointed out that, although real estate is still the channel to attract FDI investors, the return to achieving the same level of liquidity as before 2019 will not be quick even. when Covid-19 was under control.

The reason given by Savill’s representative is that although the current real estate market develops in contrast to most of the business fields affected by Covid-19, when it continues to record certain growth. But clearly, there are still some concerns and predictions that the risk of a real estate bubble will occur in 2021, otherwise at least according to the cycle of this market.

However, Mr. Matthew Powell – Director of Savills Hanoi also said that the real estate bubble was created by uncontrolled lending and speculation activities. So although the competition of this market is still a question that is difficult to find the exact answer, banks currently do not lend without a basis and lack a reasonable reason, even though the short-term interest rates are still level is low and there is no sign of growth, while large sources of capital have not been allocated.

And now, investors are also very cautious, they are only interested in low-risk products, good locations and promising quick liquidity. In addition, the Government of Vietnam is adopting adequate land policies that help limit uncontrolled growth.

What Mr. Matthew Powell wants to pay attention to businesses in the real estate sector of Vietnam in general and of each real estate segment in particular is that when developing each real estate product, it is necessary to control the output of the product well, based on General planning in the land policy of the state, then choose which real estate segment that buyers are in need. Along with that is the complete internal utility and the synchronous connection of surrounding utilities.

“Once again, I think that in any country, real estate is still an industry that has never pointed an arrow downwards, even when the economy is in crisis. Therefore, it (Real Estate – PV) needs specific policies. And once the Government has adequate land policies, it not only contributes to limiting internal uncontrolled growth phenomena, helping to solve the real demand for housing of the people. It also makes this market develop transparently, creating leverage to attract strongly investors and International Financial Fund ”, Mr. Matthew Poweel concluded.


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