Realty interest hitting the heights in Vietnam

Realty interest hitting the heights in Vietnam

A series of real estate projects have been legally cleared as the new year approaches, boosting market supply and buyer choice.

The level of interest in the real estate market has increased in Q4 as demand focuses on townhouses, apartments, and land plots for developers to start launches.

In the first week of December, Malaysian developer Gamuda Land organised an event with more than 2,500 guests for the launch of Alpine and Forest Towers of Eaton Park.

According to Gamuda Land, the two subprojects were built on the success of an initial launch in May which drove demand to outstrip supply twofold. The second phase has surpassed expectations, with bookings reaching six times the available inventory.

“This overwhelming response reflects the growing appeal of Gamuda Land’s visionary developments,” according to Gim Teck Yew, deputy chairman of Gamuda Land Vietnam.

“With Eaton Park’s prime location, robust legal framework, and bold development vision, we are offering not only an elegant and refined home but also a remarkable investment opportunity. Our commitment to Vietnam is unwavering, with an additional $10 billion earmarked for future projects,” Yew said at the event.

With a total estimated gross development value of $1.1 billion, Eaton Park spans 3.7 hectares and will feature six towers ranging from 29 to 39 storeys, offering just over 2,000 units, including luxury apartments, duplexes, penthouses, retail outlets, and shophouses.

Also in early December, Phat Dat Real Estate Development held a selection ceremony for the Quy Nhon Iconic project in the south-cental province of Binh Dinh.

Located over 40ha along Highway 19, the main road connecting Phu Cat airport and the city centre, Quy Nhon Iconic will provide over 1,400 villas, commercial townhouses, and more. About 180 products were registered at the event, and Phat Dat expects to record revenues of over $41 million from Quy Nhon Iconic in December alone.

Meanwhile, Phat Dat is also implementing other large projects in the next few years, such as Cadia Quy Nhon in Binh Dinh province, Han Riverside in the central city of Danang, Thuan An 1-2 housing complex in the southern province of Binh Duong province, and Serenity Phuoc Hai commercial and service area in Ba Ria-Vung Tau in the south. All ventures are expected to bring in a total revenue of $2 billion for Phat Dat.

New launches

At the end of November, Khang Dien Housing Investment and Trading announced the sale of phase 1 of the Foresta complex in Thu Duc of Ho Chi Minh City. Over an area of 12ha, Khang Dien, which cooperated with Keppel Land for the undertaking, will offer 200 townhouses and villas, with prices starting from $750,000 per unit.

Also in November, CapitaLand Development (CLD) announced that more than 90 per cent of its 774 units in Orchard Hill, the second phase of the Sycamore projects in Binh Duong province, were sold in one month.

This follows on from the success of The Orchard, the venture’s first phase, where over 70 per cent of the units were sold in March.

CLD achieved 92 per cent of units booked during the exclusive weekend preview of The Senique Hanoi on November 9. This event marks CLD’s fourth sales launch and exclusive preview this year, with strong interest recorded across major developments, including Lumi Hanoi in the capital city and the first two phases of Sycamore in Binh Duong New City.

In the south, Bcons Group and Tan Dong Hiep Group in October started construction of the Tan Dong Hiep apartment project in Binh Duong province. The 850 apartments for rent and 1,800 for sale will be made available in 2025 and handed over in 2027.

Le Nhu Thach, chairman of Bcons Group, said it will contribute to solving the urgent need for housing, especially for the workforce in industrial parks in Binh Duong province and Ho Chi Minh City.

“For 10 years, we have provided more than 10,000 apartments to meet the accommodation needs of more than 40,000 residents in the southern provinces,” Thach said.

In addition, a series of investors such as Phu Dong Group, BCG Land, Tran Anh Group, and Cat Tuong Group also announced the opening of sales of apartment projects, land plots, townhouses in many provinces and cities in the southern region.

Investment flow in the south

Dinh Minh Tuan, sales director of Batdongsan.com.vn, cited data from its survey of 180 Hanoi investors showing that two-thirds of respondents are interested in real estate in the Ho Chi Minh City market. The results also indicate that Hanoi-based investors are starting to lose interest in the capital market because of skyrocketing prices, with a fall of nearly 50 per cent compared to the peak in March.

“Buyers in the south are also increasingly searching for real estate in Ho Chi Minh City. This is an interesting shift. From the fourth quarter, the level of interest in the real estate market in Ho Chi Minh City has increased again and search demand focuses on townhouses, apartments, and land plots,” Tuan said. “The Ho Chi Minh City market has a lot of potential and reasonable prices. With around $200,000, investors have many options in both the suburbs and the centre for a property to rent or resell for profit.”

Meanwhile, Duong Minh Tien, general director of Asia New Time Real Estate Company, said that the movement of capital flows in satellite urban areas in Ho Chi Minh City, Dong Nai, Binh Duong, and Long An is growing rapidly.

“Many land and townhouse ventures in this area have seen transaction prices rise by 10-20 per cent compared to the same period last year and are hunted by buyers,” Tien said. “So far, we can see that the most difficult period for real estate has passed and the market is entering a new cycle. Many investors have begun to return to the market to look for suitable products.”

Tien also said that 2025 is a pivotal year of transition between the old and new periods. “The three important land-related laws taking effect will create a stable legal corridor and a premise favourable for the market in the next stage. Therefore, 2025 is considered a year that will open a new period of development for the market,” he said.

At a meeting of Ho Chi Minh City People’s Council on December 11, People’s Committee Chairman Phan Van Mai said that 12 commercial housing projects were granted a licence in 2024, including social housing projects.

“This year, the committee has also removed issues for 30 delayed projects out of the 64 projects in the list of reviewing,” Mai said. “The city’s working group is also coordinating with ministries and sectors to clarify unclear regulations or propose amendments to create a practical legal basis for granting or adjusting ventures in an aim to push the process up.”

According to the Ho Chi Minh City Real Estate Association, since 2022, around 64 real estate projects from 57 developers have been beset by prolonged legal problems, including social and commercial housing projects which are subject to legal review and inspected for continuous development steps.

CapitaLand Development achieved 92 per cent of units booked during a preview weekend for The Senique Hanoi

John Campbell, director and head of Industrial Services, Savills Vietnam The first quarter of 2024 was relatively slow for the development of real estate in Vietnam. However, the second half of the year has seen a significant uptick in activity. From Savills’ perspective, we’ve observed a substantial increase in site visits, MoUs, deposits, and lease contracts being signed. The brokerage market is much more active compared to the previous year. Macroeconomic indicators also support this positive trend. In the first nine months of this year, manufacturing foreign investment has increased by over 10 per cent compared to the same period last year. Additionally, the Purchasing Managers’ Index (PMI) for industrial production has been above 50 points for most months of the year, indicating expansion. Even after the impact of the typhoon in February and September, the PMI rebounded to 51.2 points in October. Export figures for 2024 have also been positive, with computer and electronics exports increasing by over 20 per cent compared to the previous year. This positive sentiment is reflected in the increased leasing activity of developer clients. Manufacturers are more willing to proceed with site visits, shortlisting, negotiations, and signing lease contracts. Looking ahead to 2025, the momentum gained in the second half of 2024 is expected to carry over into the first half of the next year. While there are uncertainties in certain industries, such as solar production due to potential tariff impacts, the overall outlook for investments in electronics manufacturing equipment from markets like Europe, the US, China, and Taiwan remains positive. David Jackson, principal and CEO Avison Young Vietnam There has been a sharp rise in foreign direct investment (FDI) in real estate despite global slowdowns. Foreign investor confidence in Vietnam remained strong, and they continued to implement licensed or approved projects. Realised FDI reached $21.68 billion in the first 11 months of 2024, a 7.1 per cent increase on-year. With continued disbursements, total committed FDI for 2024 is projected to surpass last year’s figures, potentially setting a record for the 2019-2024 period. While global manufacturing activities have not yet recovered and the world’s major real estate markets remained sluggish, Vietnam’s real estate sector saw impressive growth in overseas funding. Accumulated registered FDI in real estate surged 89.1 per cent on-year, reaching $5.63 billion by November. This robust inflow highlights Vietnam’s increasing appeal to foreign investors. Not only are they driven by favourable policies, a growing population, and rapid urbanisation, investors also see demand outpacing supply across sectors such as industrial and logistics, housing, offices, and retail. Improvements in legal frameworks and infrastructure development in 2024 have further enhanced the real estate market’s attractiveness.

VIR