“Will Improved Transportation Infrastructure Boost the Real Estate Market in the Western Region?”
Transportation infrastructure development is a pivotal factor in stimulating the real estate market in the western region of Vietnam, according to MBA Nguyen Hoang, a renowned real estate expert. While the market in this area is growing, its scale pales in comparison to that of Ho Chi Minh City and the Southeast region.
“The rapid expansion of projects, coupled with a slower-than-expected population growth rate, has resulted in a disparity between the two regions,” explains Mr. Hoang. “The upcoming construction of 1,500–2,000 kilometers of highways and the improvement of transportation networks across the region are expected to boost the economy, particularly in agriculture, aquaculture, and other sectors.”
Mr. Hoang likens transportation infrastructure to the lifeblood of the western region’s economy, predicting a brighter future for real estate projects: “With these transportation developments, the real estate market will undoubtedly flourish.”
A stretch of the My Thuan – Can Tho Highway.
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Sharing this viewpoint is Mr. Pham Trong Phu, Director of Titanium Company, who highlights the population disparity between Ho Chi Minh City, with its 8.9 million inhabitants, and the 13 provinces of the western region, collectively housing half that number. He emphasizes the necessity of a robust population for the sustainable development of any area and the subsequent creation of job opportunities.
Mr. Phu continues by discussing the ongoing formation of transportation infrastructure, including upcoming highways and belt roads, which will establish a comprehensive transportation system for the Southeast region. With a stable population density, the real estate market in this area is projected to grow sustainably.
TS Su Ngoc Khuong, Deputy Director of IIB, offers a contrasting perspective, noting that only a handful of new construction projects have received permits this year. He predicts that the supply entering the market until the year’s end will not be overwhelming. Furthermore, the products introduced during this period do not align with the average income of workers, making it challenging for them to afford housing in Ho Chi Minh City.
However, the equation changes when considering the positive impact of interregional transportation linkages on the real estate market. TS Khuong anticipates a potential surge in secondary product sales, resales, and land plots if the market warms up by the year’s end. “When transportation infrastructure improves, making a 30–45-minute commute possible, the real estate market will inevitably attract investors, both domestic and foreign,” he shares.
Nevertheless, Mr. Khuong cautions that the mere presence of roads does not guarantee a corresponding boom in real estate development. Other crucial factors include economic conditions and social welfare in the area. He predicts that the real estate market in 2025 will be influenced by macroeconomic factors, the enforcement of relevant laws, and market acceptance.
With the new Land Law taking effect in August, there are concerns about stricter regulations on land subdivision and plot sales, potentially limiting supply. Additionally, the announcement of a new pricing matrix for 2025 is expected to drive up land prices. These factors, combined with the current financial constraints of investors, make it challenging to replicate the investment wave witnessed in 2020–2021.
TS Dinh The Hien, Director of the Institute of Informatics and Applied Economics, agrees that a large-scale investment wave in land plots is unlikely in the western region. However, he suggests that the Southeast region, with its vibrant economy, seaports, airports, and numerous industrial parks, could be a potential hotspot for investors.
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