Real Estate Market Sees Many New Segments

 

In general, the property market slumped in 2009 and contrary movements in Hanoi and Ho Chi Minh City, the two largest markets in Vietnam, caused the instability of the market. Widest fluctuations occurred in the office for lease segment, with a drop of 20-30 percent, even 50 percent at some points of time. Besides, the global economic crisis, rooted from property market, dragged down on office rentals. This was a good chance for many to purchase or lease suitable offices and demand rebates.

 

Despite market slumps in 2009, many new big projects, with gigantic scale and investment, were carried out in major localities, especially Hanoi and Da Nang. A number of apartment, office, shopping centre and golf course projects started by Vina Capital, Indochina and other giants created an active market, and attracted interest and participation of foreign investors.

 

The lowering price of apartments is also noteworthy highlight in 2009. Hoang Anh Gia Lai Group took the lead in slashing apartment prices, even luxury apartments in the area HCM City, followed by Nam Cuong Group which reportedly sold apartments at original selling price to buyers through lucky draws. This has made a new revolution on the property market.

 

Besides, systematic problems, to a certain extent, distorted the market. Although the reform of public administration in construction investment was improved, in reality, projects in Vietnam were implemented at slower progress because of administrative procedures and site clearance among others. Also, inflation was another cause for the hesitance of investors in pouring funds into construction.

 

Stepping into 2010, according to experts, the realty market will have a brighter outlook. The return of foreign investors and multinational corporations will lay groundwork for the Vietnamese retail market to revive.

However, real estate experts pointed out that the office market segment will continue to sink in 2010 due to high supply. When the supply is plentiful, the competition will become fiercer and lessee will have more choices.

 

According to experts, in 2010, the property market is expected to see many new changes. Major localities like Dong Nai, Nha Trang, Ba Ria Vung Tau, Binh Duong and Hai Phong will be favourite destination for investors. In fact, this trend spouted years ago because big cities have favourable traffic system, easy access to other major localities, lower land expenditure, large population, presence of many industrial parks, factories, hospitals, schools, seaports and airports, etc. to build big apartments.

 

When the economy begins to grow and the real estate market develops to a certain threshold, the needs of investors and the consumers also will start to change. Investors will need consumers more and customers also have more choices. This is the basis to form a healthy market and attain sustainable development. The quality of services and projects is cared more.

 

There will be more property market segments to meet more diversified demand of consumers. High-end segments of urban area zone, offices and apartments situated in ideal locations will be expanded.

 

Hanoi is now home to many underway high-grade projects in Me Tri, Le Van Luong and Le Trong Tan, etc. In 2010, more overseas Vietnamese are forecast to return to the homeland to buy houses and this is an opportunity for tourism property market to develop further.

 

The Ministry of Construction said in 2010 the property market in Vietnam will witness local fevers, especially in Hanoi, when the master plan for urban zones will be considered and approved by the National Assembly. Because when the new plan is issued, many projects will be licensed and constructions will be carried out. However, lessons from unusual phenomena like bubble in 2009 require investors and consumers to define their approaches, viewpoints and thoughts about this market as real estate is a relatively special commodity, unlike gold, foreign currencies which can be added up supplies easily when the demand is high.