The urbanisation ratio in Vietnam is estimated to reach 30 per cent in 2010 and 50 per cent in 2020. The ratio in Hanoi now approximates 57 per cent and is projected to reach 70 per cent in 2010 and 85 per cent in 2020. Thus, the real estate market and market players need to develop a healthy market to avoid overheated fevers or long-day freezing periods.
The Vietnamese real estate market has undergone six stages of development, five of which were called freezing stages. Since early 2007, the real estate market showed signs of recovery but still failed to meet expectations of investors. According to experts, to develop a health real estate market, all market players need join efforts.
Le Khac Hiep, Chairman of Vincom Joint Stock Company, said, Vietnam needs to introduce many measures to professionalise the real estate business in the next 5-10 years. This needs efforts from the State, investors and the people.
Experts said Vietnam encountered difficulty in urbanisation because new urbanisation projects usually focus on new areas and investors dislike existing urban areas due to the complication of social aspects and supportive mechanisms. This will lead to a consideration of comparative advantages in developing real estate projects. In a real estate project, the planning is an important content in balancing social benefits and business profits for investors. However, it takes time to carry out such a project and the planning is only a projection. Therefore, investors should be allowed to take part in the planning phases of 1:2000 mapping and 1:500 mapping.
Synchronous policies needed
Experts said the real estate market needs diversifying. Vietnam should gradually socialise infrastructure investment and public utilities, introduce measures to encourage the construction of houses for low-income earners, and increases the attractiveness of Vietnamese real estate market against regional ones.
Besides, it is necessary to complete the legal framework to increase the liquidity of real estate into investment capital, create a common registration system and publicise real estate market. At the same time, the government should give financial incentives to real estate projects. Especially, it is essential to increase the quality of land planning and development investment planning, which will both benefit investors and the State. The State should also actively regulate the land price by supply-demand relationship and speed up the tax system reconstruction to synchronise with new policies.
To increase the activeness for investors, the government should give detail planning based on basic criteria such as population projection, land zoning and infrastructure. The synchronous implementation of projects will then benefit all walks of life. Many urban zones only focus on developing high-rise apartment blocks. However, there are not many for low-income earners.
Cooperation for stronger business
As a property investor, Mr Hiep emphasised that Vietnamese enterprises should quickly quit their traditional separate business operations to join hands together to catch up with the current development of the market. Currently, the professionalism is creating competitive advantages. Vietnamese investors should go to specific fields to serve their market segments. Importantly, they should join forces to compete with international firms.
The cooperation of many companies will enable the formation of a professional supply chain of services for the entire project development process. In fact, Vietnamese companies hold great advantages because they understand the culture, habits and psychology.
The determination of targeted markets together with the deep understanding of customer segments lays the first step for a successful marketing for a real estate project. Hiep recommended that property developers should pay attention to marketing development and market surveys to understand the demand and tastes f customers to reap successes.
Vietnam is developing very quickly and the demand for real estate continues to be on the rise in the coming time. The price of real estate will increase in several years to come but the buyers will choose products of higher quality and better management. Thus, this market also contains risks and this requires developers to be more professionalised to avoid risks.
6 development stages of Vietnamese real estate market
* Spontaneous development stage before 1993
* First boom from 1993 to 1996, attached to the issuance of land and housing policies
* Recession period from 1997 to 1998, due to the impacts caused by Asian financial crisis
* Active booming period from 1999 to 2003, fuelled by urban, new urban area and apartment development policies
* Stagnation period from 2004 to 2006
* Recovery period since early 2007, the market is more freely developed after the introduction of legal documents (laws on real estate trading, houses, residence, construction and investment)
Thi Van
Vietnamese
