Friday, 01/24/2020 07:29

Hundreds of millions of USD await to enter Vietnam’s realty market

The Vietnamese real estate market at all segments continues showing its appeal to foreign investors, and hundreds of millions of USD are waiting to be poured into the market, according to a research conducted by property and investment management services firm Jones Lang LaSalle (JLL).


Particularly, investors from Japan, the Republic of Korea, Singapore, and an increasing number of investors from China, are showing their interest in the affordable housing segment in the Southeast Asian country.

JLL’s recent figures revealed that the total supply of apartments in Ho Chi Minh City and Hanoi reached 201,707 and 224,179 units, respectively, as of the end of Quarter 4 in 2019, equal to a rate of 17 apartments per 1,000 people. As the rate is really low, the focus should be channeled into the mass housing market where there is real demand.

In the next two decades, Vietnam will enter the demographic golden period with 25 percent of the population aged between 10 and 24 and a median age around 30. The young will be the main driver for affordable housing, especially projects near industrial parks and having favourable connection to major traffic points.

While many investors are interested in low-cost housing projects, it is a little bit hard for them to overcome initial challenges in doing business in an emerging market like Vietnam.

Accessing to a good land fund is a major hurdle for the investors who often look for “clean” land with land use right, good planning as well as completion of compensation and site clearance procedures. However, the assets are currently rare in Vietnam; therefore, JLL suggested foreign real estate developers consider partnering with local groups or professional consultation companies to break into the market.