Identifying genuine hotspots
Identifying genuine hotspots
Transport infrastructure with regional connectivity will be accelerated in 2023, which is expected to boost the coastal real estate market and open breakthrough opportunities.
In Bao Loc of Lam Dong province, after a quiet period, the real estate market has started to warm up after the construction of the Dau Giay-Tan Phu Expressway first phase was approved. The project is part of the Dau Giay-Lien Khuong Expressway construction venture.
The route, which will cover over 60km and is hoped to be in action by 2025, comes under the public-private partnership model at a total value of VND8.3 trillion ($352.5 million). Investors and businesses have contributed about VND7 trillion ($297.3 million), while the remainder is from state capital.
It is expected that when Dau Giay-Lien Khuong Expressway is completed, it will cut the travel time by car from Ho Chi Minh City to Bao Loc significantly, which will benefit the real estate market of both Dalat and Bao Loc.
In addition, the southern localities have also recently witnessed many large-scale infrastructure activities to promote interregional connectivity, such as the Ring Road 3 project in Ho Chi Minh City, Bien Hoa-Vung Tau Expressway, and the Ho Chi Minh City to Binh Phuoc and Moc Bai expressways.
Real estate traders say that these interregional infrastructure works, most of which are expected to be completed by 2026, will create a boom for the real estate market.
According to Nguyen Xuan Loc, general director of Techcom Real Estate JSC, real estate prices are constantly increasing amid the growing scarcity of land in central areas of Ho Chi Minh City. “Infrastructure has propelled the formation of satellite urban areas, expanding the real estate market to areas with more diverse products. Meanwhile, property prices rise in tandem with connectivity,” Loc emphasised.
Experience in the suburbs
The real estate market in Nhon Trach of Dong Nai province and surrounding areas has become increasingly vibrant since the Tan Van-Nhon Trach section first phase officially began. The route is the component 1A project of Ring Road 3 in Ho Chi Minh City.
In Binh Duong, about 16km of Ring Road 3, crossing Di An city and part of Thuan An city, have been developed at a scale of six lanes. On this route, a slew of real estate projects have taken shape, such as Royal Town Di An, An Residence, Binh Nguyen Urban Area, LDG Sky Binh Duong apartments, and Phu Hong Thinh 6.
The second section is about to be implemented with a route that crosses the southwest of Thu Dau Mot as well as Thuan An. Across the route, the real estate projects have mushroomed.
For instance, Happy One Central is located at Thu Dau Mot city. Not far away is Becamex IDC’s Becamex Tower commercial centre and offices. Tokyu Binh Duong urban area Garden City is also there, boasting capital of $1.2 billion from the joint venture between Becamex Tokyu and Mitsubishi Estate Residence.
Towards Long An, there are also dozens of projects following Ring Road 3. Notably, one corporation from Malaysia has proposed an urban and industrial complex in Ben Luc district with a total area of about 2,600 hectares.
Tran Van Duong, general director of Five Star Group, shared that the value of real estate depends on many factors. Among them, technical infrastructure is the key factor. Real estate projects will benefit a lot from traffic infrastructure due to convenient traffic and reduced travel time. Thus, products can reach the market from more directions to expand the customer base.
“In the past, we used to think of the outskirts as the areas bordering big cities. Now we need to redefine it. Outskirts are not only defined as the areas with proximity to the city, but are also determined by the travel time to the city,” Duong stressed.
Commenting on the development potential of the suburban areas, Tran The Anh, sales director of Thang Loi Group, analysed that projects are usually well planned in the suburban areas with low construction density, a green living environment, and many amenities. “Thus, in the long run, suburban areas have great growth potential. In particular, the construction of infrastructure projects will promote development in suburban areas,” The Anh said.
Sharing experiences with investors eyeing suburban real estate, Tran Thi Cam Tu, general director of EximRS Real Estate JSC, noted that to avoid risks, investors should choose projects developed by large and reputable companies. In particular, it is not recommended to use loan capital exceeding 40 per cent of the product value to make investments at the moment. Investors should think long-term rather than make speculative investments.
“Besides well-invested and planned projects by large enterprises, there are also spontaneous product lines like land divisions for sale in the suburban real estate market. With this product line, investors need to take it into careful consideration before making a purchasing decision,” Tu said.
Investors should choose a project in the suburbs that matches their financial ability, according to Tu, and it must have a convenient location, good regional connectivity, full amenities, and legal documents.
