Vietnam had reported pledged US$21.4 billion of foreign direct investment (FDI) into real estate sector between January and July this year, accounting for 48 per cent of the country’s total newly-registered capital, much higher than 35 per cent last year and 22 per cent in previous years, the Ministry of Planning and Investment (MPI) reported.
Of the total investment, up to US$13 billion was poured into luxury urban areas and buildings for office lease, nearly US$8.3 billion in tourism and hotels, and the rest for infrastructure in export processing and industrial zones.
Canadian Asian Coast Development Ltd was the biggest foreign investors in the property in the seven-month phase with a US$4.2 billion resort in southern coastal Ba Ria-Vung Tau province, followed by the Malaysian Berjaya Leisure group with a US$3.4-billion university township in Ho Chi Minh City and the Starbay Holding Ltd. (B.V. Island) a US$1.65 billion resort, golf course and apartment complex in southern Kien Giang province.
Meanwhile, economists expressed their concerned about the big flow of capital into the realty industry.
“The sharp rise of FDI in the property market will accelerate trade deficit as foreign investors will have to import massive materials for their projects”, said Pham Chi Lan, a senior expert.
Le Dang Doanh, a chief economist, said that soaring realty investment does not help generate jobs and boost technology transfer, production and export.
Despites those worries, Phan Huu Thang, head of the MPI’s Foreign Investment Department said Vietnam is now in short of property supply sources. Therefore, a large influx of foreign investment into this sector will help the country ease the shortage.
It is important for authorities and relevant agencies to improve their capacity in capital management, supervision and disbursement to ensure balanced and suitable patterns of development for their localities, he suggested.
Vietnam has allowed foreign real estate brokers with valid licenses granted by foreign agencies practice in Vietnam, according to the Ministry of Construction.
The ministry will issue specific regulations on granting real estate brokerage and appraisal certificates to foreign individuals in the near future. (VNA)
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