A growing economy and the government’s decision to allow overseas citizens and foreigners to buy homes in Vietnam have speed up the growth in the real estate sector of HCM City.
Experts have predicted that real estate market of HCM City will maintain its high growth rate in current year, given the rising demand and accelerating economic growth, as reported by VNS.
Nguyen Xuan Chau, General Director, Nova Company, a leading real estate company in HCM City said, "real estate prices in 2008 will increase by some 30-35%", as reported by VNS.
Chau made this forecast after realizing that the demand for real estate is increasing but supply is less. As the population in every district of HCM City is growing by nearly 300,000 people annually, supply can cater to a mere 10% of the demand, creating a massive demand in HCM’s real estate market.
As the growth rate of the economy will remain high in 2008, the city’s real estate market is expected to witness another exciting year. The rush of the Vietnamese to buy luxury apartments has given a clear idea to real estate developers about what they actually need, and hence, it is expected that modern western style apartments will be top priority of the people this year.
Moreover, the government policy of allowing non-resident Vietnamese and foreigners to buy homes in Vietnam will lead to rising home prices in the city in near future. This policy has prompted property dealers in the city to increase their prices. Even the high prices have not deterred investors from their intention is to resell the properties to foreigners at higher rates in future.
Another factor that has pushed growth in the real estate industry is foreign investors’ enthusiastic investment in this sector. The rise in HCM’s real estate prices is being further helped by Foreign Direct Investment (FDI). In January 2008, licenses were granted to 35 new foreign-invested projects, adding up to a registered capital of $1.65 Billion, a 21% YOY increase in project figures. In 2007, HCM City witnessed nearly 85% of FDI in the property sector.
According to a Senior Research Analyst at RNCOS, “The real estate prices will further go up due to increasing home buying by foreigners. Due to lack of balance in demand and supply in the real estate market and to provide stability in the market, the government has to increase supply by easing the restrictions to spur development in real estate projects.”
Related Market Research Reports:
Booming Financial Sector in Vietnam (2007-2011)
