Vietnamese housing market to find its groove in 2017
Vietnamese housing market to find its groove in 2017
From FDI to tourism, economic fundamentals for the ASEAN nation bring good tidings ahead
For a year that missed growth domestic product (GDP) growth targets and was riven by a fairly turbulent climate, both environmental and political, 2016 was still auspicious for real estate in Vietnam.
More than 70,000 apartment units were launched last year in the country’s two largest cities, Ho Chi Minh City and Hanoi, with sales reaching 67,000 units, according to Jones Lang LaSalle Vietnam. The residential property market is expected to carry this strong performance over to more affordable segments this year, experts predicted.
“In 2017 it is likely that the momentum will continue and the residential market will move into a more sustainable mode, with the expansion of lower-end segments and improvements in owner-occupier demand versus investor demand,” Jones Lang LaSalle country manager Stephen Wyatt told the Vietnam Economic Times. “Prices will grow further.”
The Vietnamese GDP grew 6.21 percent last year, down from 6.68 percent in 2015. The slight setback could be attributed in part to several natural disasters, including wide-scale saline intrusion in the Mekong Delta and drought in the Central Highlands. An environmental disaster caused by Taiwanese firm Hưng Nghiệp Formosa Hà Tĩnh Steel Corp also disrupted production and farming in the central region.
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“The market in Vietnam will witness another strong year in 2017,” said Wyatt. “The economy is performing well and is considered one of the best performers in Southeast Asia. We expect to see considerable activity in all sectors of the market, with a positive focus in low- to mid-end residential in cities, Ho Chi Minh City’s office market, hospitality, and industrial.”
Vietnamese foreign direct investment (FDI) in 2016 was especially strong, receiving an estimated USD15.8 billion, according to government data cited by Reuters. This represents a 9 percent increase over 2015.
The country has become a manufacturing dynamo in Southeast Asia, with companies like Samsung and LG establishing factories in the country on the back of the Korea-Vietnam Free Trade Agreement. The latter notably announced plans to pour USD1.5 billion on an OLED screen plant and USD550 million on a camera plant last year.
Tourism also turned out to be a healthy economic growth engine. A record 10 million foreigners visited the country last year, a 25 percent increase from 2015.
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Source: Property Report