For years, the Vietnamese real estate market is always a fertile land for foreign companies and the foreign finance for the real estate market normally takes the lead in foreign capital flows into the Southeast Asian nation. When the global and Vietnamese economies are regaining growth momentums, foreign investors begin to return to the Vietnamese property market.
In financial advantage, most Vietnamese real estate companies are inferior to foreign firms in fundraising. Moreover, economic fluctuations have considerably impinged on investment activities of domestic enterprises. If the market is frozen for a short time, domestic real estate companies will encounter difficulties
At present, many projects are lacking investment capital for infrastructure development or foundation construction although they have the sites cleared. The difficulty against the Vietnamese real estate companies is the good time for foreign investors. Previously, foreign investors feared the excessively high land prices in Vietnam, resulting to low earnings, but when banks tightened lending for real estate developers and homebuyers, the market cooled down and the property price slumped as a result. The land price in several project locations has declined up to 50-60 per cent. The compensation value for residential housing and urban projects also dropped 20 per cent.
According to economic experts, when the economy picks up, the Vietnamese real estate market is offering golden opportunities for foreign investors and investment funds with strong long-term financial capacity to join hands with Vietnamese entities. Through this partnership, Vietnamese real estate investors will seek capital sources while foreign investors have better investment opportunities and more favourable investment procedures.
The interest of foreign companies will create a propulsive force to the economy at this time and generate a new flow of vitality for the Vietnamese real estate market. Foreign investors will pump capital for incomplete or blue-print projects. In addition to purchasing medium-sized projects invested by Vietnamese firms, they are also targeting at big projects like Tay Bac, Thu Thiem and Hiep Phuoc.
The real estate market is a promising land for investors because of its high return on investment in Vietnam, which is gauged the most attractive in Asia. Moreover, the real estate market of Vietnam remains very potential. Incomes of Vietnamese people are also increasing and the middle-class is expanding.
On the other hand, two-thirds of the Vietnamese population are very young, aged below 35, and they are target homebuyers. Thus, even when the market was frozen, several foreign investment funds like Jaccar Capital, Dragon Capital, KITMC and Vietbridge are still expanding their involvements in real estate market.
Foreign investors also cooperated with Vietnamese firms to organise a number of real estate conferences and exhibitions to attract more investment opportunities. Remarkably, a major property investment conference in Vietnam, called Vietnam Top Property Opportunities 2009 (VnTPO-2009), will take place from October 20 to 22, 2009 at White Palace in Ho Chi Minh City. Organisers expected 200 foreign investors from 25 countries and hundreds of Vietnamese firms will participate in the event.
Luong Tuan
Vietnamese
