Exciting growth for the Vietnam property market
Exciting growth for the Vietnam property market
All signs point to a growing year ahead
Despite the devastating weather effects of climate change and China’s decelerating economy, Vietnam’s growth in the property sector appears to be unstoppable this year.
The Vietnam Real Estate Association (VNREA), citing data from the Ministry of Construction, reported that real estate inventories stood at VND44.85 trillion in the first quarter of 2016 — the strongest showing for real estate liquidity since 2012 — compared with VND50.89 trillion in the last quarter of 2015.
This finding squares with Jones Lang LaSalle’s latest quarterly report, which shows that real estate is the second-most attractive sector for foreign direct investors in Vietnam. A total of USD240 million in FDI capital, spread across 11 real estate projects, were deployed to Vietnam in the first quarter of this year.
Vietnam’s GDP growth slowed down from 6.1 percent in the first quarter of 2015 to 5.5 percent over the same period in 2016. The effects of global warming factored prominently into this decline, JLL researchers suggested.
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Domestic production has fallen due to the worst drought to hit the Mekong Delta in almost a century. The agriculturally rich area has also suffered from saltwater intrusion.
Earlier this year, a record cold spell had struck the country’s northerly climes.
Even so, the Vietnamese government is rising up to the challenge of an economic growth rate of 6.7 percent by year’s end. This could happen despite the ongoing economic slowdown in China, traditionally viewed as Vietnam’s biggest trading partner.
Vietnam’s imports from China suffered an 8 percent year-on-year decline to USD10.4 billion, JLL reported.
Japanese developers are leading the charge in disbursing FDI in property across Vietnam. This week, real estate developer and railroad operator Tokyu came forward with plans to develop a 30,000 sqm site for 9,000 homes in Binh Duong province, per Nikkei.
South Korea was the biggest overall foreign investor in Vietnam last quarter, however, funnelling USD513 million in capital or 18.7 percent of the country’s total FDI.
JLL recorded 9,720 newly launched apartment units in Ho Chi Minh City, a 63 percent year-on-year growth, while new supply in Hanoi amounted to 9,900 units.
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Source: Property Report