Vietnam ranks second in the most sought-after emerging real estate markets
US-based CBRE Group has recently released the results of a survey on “Investor Intentions and Plans in the Asia-Pacific region in 2024”, showing that the Vietnam real estate market ranks second among the most sought-after emerging markets in terms of investment strategy opportunities and value appreciation, second only to India. Thailand comes next.
Meanwhile, according to Statista, the Vietnam real estate market will be valued at $4.41 trillion in 2024. In the same year, the Thailand real estate market will be valued at $2.51 trillion.
Actual observations show that previous investments in Vietnam mainly came from familiar Asian investors such as Japan, Singapore, Hong Kong (China), and South Korea. Investment funds from more developed markets in North America and Europe have not deeply penetrated yet, however, with the unstable situation in many parts of the world, investors are seeking new opportunities and actively considering assets in the Asia-Pacific region in general, and Vietnam in particular.
Mr. David Jackson – Managing Director, Avison Young Vietnam commented: “Asia-Pacific, in which Vietnam has great potential to attract investment compared to other regions in the world. The young population, economic growth, and consumer preferences in this region show positive long-term prospects for capital that is seeking to transform itself in a world affected by conflicts and economic disruptions.”
Similarly, Mr. Nguyen Pham Anh Duy – Director of the Investment Advisory Department of CBRE Vietnam said: “We have noticed that foreign investors are actively looking for and increasing their presence in Vietnam. Vietnam has also had interest rate cuts recently which have made our market more attractive.”
According to the assessment of experts from the Vietnam Association of Real Estate Brokers (VARs), many foreign investors have started to invest in real estate projects in Vietnam through share acquisitions. The group of foreign investors mainly comes from countries such as Singapore, Taiwan, Japan, and Malaysia. The capital scale for each transaction usually ranges from $20 to $50 million.
Along with that, a large number of individual investors have started to show interest in the Vietnam real estate market. According to statistics from the Ministry of Construction, there are about 4 million people who want to buy a house in Vietnam in the future, including foreigners and overseas Vietnamese. The trend of more and more foreigners wanting to own houses in Vietnam is a good sign and reflects the potential of the developing economy.
Vietnamese real estate companies are ready to welcome large capital inflows
The policy allowed foreign organizations and individuals to buy and own houses domestically was first regulated in Resolution No. 19/2008 of the National Assembly. Then, the 2014 Housing Law supplemented specific regulations to create conditions for foreign organizations, individuals to live, work in Vietnam and contribute to attracting foreign investment. Most recently, the 2023 Housing Law, the Business Law for real estate dealings, and the Land Law have just been passed, which have opened the door for foreigners to buy houses in Vietnam, especially for Overseas Vietnamese.
According to Cushman & Wakefield’s assessment, by 2024, the number of foreign investors coming to Vietnam will increase more, leading to an increase in real estate demand. Besides, the number of domestic investors is also constantly developing and expanding their investment portfolios in real estate when this market is forecasted to recover more obviously.
Forecast for 2024, Vietnam’s real estate market will attract large capital influx from foreign investors.
Ms. Trang Bui – General Director of Cushman & Wakefield said that foreign investors usually choose a ready-made real estate segment, which is an advantage, where they have knowledge and experience developed before, to start investing in Vietnam. After a period of testing, they gradually diversify their investment portfolios. Therefore, Ms. Trang predicts that a large amount of capital will pour into the Vietnam real estate market in the period of 2024-2026 when many transactions are in the negotiation process and have positive developments.
Facing the opportunity from the large influx of foreign investors targeting Vietnam real estate, Vietnamese enterprises have also had their own strategies to attract these visitors. Sharing at the launching ceremony of the Palm Manor Viet Tri urban area, Mr. Nguyen Quoc Hiep – Chairman of GP.Invest said that there is a Japanese partner who is very interested in this project, however, the company is considering it.
Earlier, in January, the foreign fund High West Capital Partners (referred to as High West) also announced a $10 million investment in First Real Estate Joint Stock Company (referred to as First Real, HoSE: FIR), officially marking the first deal in Vietnam in 2024.
Recently, Sunshine Group has announced a strategy to launch 5 large projects in Hanoi in the residential real estate segment, including the 3rd tallest financial tower in West Lake area targeting upper-class customers. After completion, the project is expected to meet the working, leisure, entertainment, and shopping needs of the End-User customer group in the business community, multinational corporations, and international trade organizations…
Especially, according to the sharing from this Group, 2024 will be a breakthrough year when the enterprise introduces a resort real estate project in Mui Ne, Phan Thiet. This will be a distinctive resort real estate segment, suitable for the demand for finding a second home in Vietnam of the rich.
According to the assessment of experts, when the global economic situation is fluctuating, the Vietnam real estate market has the potential to attract foreign investment, especially for foreign investors. Particularly, an attractive return on investment in an emerging market like Vietnam is an important factor in the investment decisions of foreign investors. This is also an opportunity for real estate companies to take advantage of foreign capital inflows in 2024.
