Where Will the New “Hotspot” of the Real Estate Market Be Post-Merger?

Northern Vietnam’s Real Estate Market: The Rise of Hai Phong

Hai Phong’s real estate market has been hailed by experts as a shining example for Northern Vietnam. Mr. Bui Van Doanh, Director of the Vietnam Institute of Real Estate Research – Vietnam Real Estate Association, asserts that “Hai Phong’s real estate market is experiencing very positive shifts. This is due to a unique combination of its strategic location, national development orientation, and growing consumer interest in emerging markets.”

Mr. Doanh highlights four key advantages that set Hai Phong’s real estate market apart. Firstly, breakthrough infrastructure development connecting the region and the world is the most prominent factor in Hai Phong’s rapid growth. Major projects, such as the Hoang Gia Bridge, Tan Vu – Lach Huyen Bridge, and the coastal highway linking Hai Phong, Quang Ninh, and Thai Binh, have been completed. The Lach Huyen International Gateway Port is being expanded to accommodate vessels over 100,000 tons, solidifying Hai Phong’s position as the country’s leading maritime cargo hub.

Additionally, plans are underway to upgrade Cat Bi Airport to an international regional airport, serving both cargo and passenger needs for the entire Northern region.

This robust infrastructure development is becoming the “golden key” to unlocking Hai Phong’s real estate market potential.

Secondly, a strong push from high-tech industries and high-quality FDI sets Hai Phong apart. The city has become a top Northern destination for multinational corporations such as LG, Pegatron, Bridgestone, Kyocera, Toyota Boshoku, and Regina Miracle, attracting significant capital and a large number of experts, engineers, and skilled workers. These professionals demand quality housing and an elevated standard of living. The integrated model of “industrial park – urban area – service” (VSIP, Nam Dinh Vu, Deep C, etc.) is being replicated to cater to this demand.

Thirdly, the emergence of a local elite class and a shift in capital flow further bolster Hai Phong’s real estate market. The city boasts one of the highest per capita incomes in the country, and its middle class is rapidly expanding due to growth in industries like manufacturing, logistics, and trade. Notably, capital inflows from neighboring metropolitan areas like Hanoi and Quang Ninh are not solely driven by investment goals but also by the pursuit of a new standard of living.

Lastly, Hai Phong is a strategic growth pole in Vietnam’s national development orientation. According to the master plan for the 2021-2030 period and vision towards 2050, Hai Phong aims to become a highly developed city, ranking among the top cities in Asia and the world.

According to VARS, Hai Phong offers a unique combination of advantages: ample land resources, robust infrastructure, progressive policies and institutions, and a rapidly growing real demand. Additionally, Hai Phong’s real estate market is poised for growth, with apartment prices ranging from VND 30-55 million/m2, only about 50% of Hanoi’s prices. This presents a significant opportunity for investors with a mid to long-term vision, especially as real demand increases and investment capital flows towards regions with high potential.

Notably, Hai Phong is attracting prominent investors such as Vingroup, BRG Group, Hoang Huy, Van Phu Invest, Masterise Homes, BĐS HP, and N.H.O (South Korea). This influx of renowned developers underscores the allure of Hai Phong’s real estate market.

Well-planned urban projects like Vinhomes Royal Island, Vinhomes Golden City, Hoang Huy New City, and Vlasta Thuy Nguyen, along with apartment complexes like The Zenith Hai Phong, Gem Park, and Golden Crown Hai Phong, are not only transforming the city’s landscape but also serving as catalysts, attracting both homebuyers and investors to the Hai Phong market.

Central Vietnam’s Real Estate Market: The Appeal of Da Nang

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, predicts that post-merger, Da Nang will remain the “locomotive” and a hot spot for Central Vietnam’s real estate market. Its modern infrastructure, meticulous planning, and synchronized service ecosystem have solidified Da Nang’s appeal among the middle and upper classes and experts working in the region’s industrial parks.

Da Nang is not just a coastal economic center and a centrally-governed city; it’s also the strategic “gateway” to Central Vietnam. The city leads the region in attracting domestic and international tourists, thanks to its diverse ecosystem of resorts and its close association with the sea and nature. Additionally, Da Nang is shaping its role as a technology, logistics, and education hub, housing one of the country’s three high-tech parks and boasting the Tien Sa and Lien Chieu seaports and an international airport within its boundaries.

Da Nang’s distinct appeal also stems from its high quality of life. As one of Vietnam’s most “liveable” cities, Da Nang impresses with its clean environment, abundant green spaces and water bodies, and well-developed urban services. These attributes align with the emerging trend of combining vacation and residence among locals and investors.

The merger has resulted in a significant “leap” in population scale, land fund, and financial resources, creating ample space for developing socio-economic infrastructure, attracting more enterprises, and meeting the growing real housing demand. Additionally, the activation of satellite cities will help distribute the population, reduce pressure on the core center, and open up development opportunities for large-scale urban, complex, and tourism real estate projects.

Several strategic infrastructure projects are expected to be expedited, including the Da Nang – Hoi An – Chu Lai coastal road, the expansion of the international airport, the North-South Expressway, and the Lien Chieu Port. These projects will enhance inter-regional connectivity and facilitate the formation of modern industrial, logistics, and service real estate corridors.

With its harmonious blend of synchronized infrastructure, maritime economic and tourism potential, superior quality of life, and new impetus from the merger, Da Nang is poised for a breakthrough in its real estate market. The city is forecast to become a magnet for domestic and foreign capital, especially in satellite city, tourism and resort real estate, and industrial real estate associated with logistics.

Southern Vietnam’s Real Estate Market: The Metropolis of Ho Chi Minh City

According to VARS, in Southern Vietnam, the newly expanded Ho Chi Minh City, which now includes Binh Duong and Ba Ria – Vung Tau provinces, spans over 6,700 km2 with a current population of over 14 million, projected to reach 18 million by 2030. With this expansion, Ho Chi Minh City has officially become the largest metropolis in the country.

In the coming years, the merged Ho Chi Minh City will continue to expand its scale, stature, and market reach, benefiting from but also experiencing differentiation across regions. Areas with strong infrastructure and economic foundations, such as the northeast of Ho Chi Minh City, will be the first to reap the benefits and experience the most significant “bounce.”

This expansion has attracted strong interest from domestic and foreign investors looking to establish themselves in the region, particularly from northern investors increasingly eyeing southern real estate markets, especially Ho Chi Minh City and the merged provinces of Binh Duong and Ba Ria – Vung Tau.

Experts predict that three groups of investors will heavily invest in Ho Chi Minh City’s (new) real estate market. The first group comprises investors with strong financial resources seeking long-term investment opportunities in central areas like District 1, Thu Thiem, and the former Thu Duc City, which offer both asset protection and profitable rental prospects.

The second group focuses on real estate near key infrastructure projects like metro lines, beltways, and airports. The third group consists of loyal followers of prominent northern developers like Vingroup, Masterise, Ecopark, and Sungroup, who invest in their projects in Ho Chi Minh City and neighboring provinces.

In the first half of the year, transactions from northern investors accounted for approximately 15-20% of the total, a 10-15% increase from previous periods, although still below expectations as investors remain cautious.