A section of Nguyen Van Linh Road in District 7, HCM City. (Illustrative photo:VNA)

HCM City (VNA) - The Vietnamese real estate market is poised for strong growth in the next 15 years, but the Government should prevent speculation to avoid a bubble and improve human resources and infrastructure to attract foreign developers as the country integrates, a foreign expert has said.

Sigrid Zialcita, managing director of Cushman & Wakefield, Asia – Pacific, told the recent Property Report Congress Vietnam 2016 in HCM City that the Asia Pacific real estate market will grow the highest globally at 5.2 percent this year, and Vietnam, Indonesia and the Philippines will lead ASEAN’s growth.

Foreign investors are looking at Vietnam with interest as its exports [by foreign companies here] increase significantly and are looking for a place to produce to replace China and Singapore, where costs are too high, according to the expert.

Recent improvements in infrastructure have taken Vietnam to the next level of development, but the country must work hard to compete once FTAs and the TPP come into effect.

In the office segment, HCM City and Hanoi have much less space than neighbouring countries, and Vietnam must speed up supply.

The 542,000 square metres of space under construction cannot meet the demand and office investment is set to double by 2020.

The hospitality industry would need more than 120,000 rooms by 2030 to meet tourist demand.

“We have witnessed strong development by the retail industry with the entry of many foreign groups from Japan and Thailand and the country will need another 4.3 million square metres for the industry by 2030.”

Marc Townsend, managing director of CBRE Vietnam, said resorts are seeing significant development in Nha Trang, Da Nang and Phu Quoc.

“Two years ago we did not pay attention to that kind of real estate but now everything has changed. International direct flights to these destinations have boosted the real estate market.”

He said land prices have increased by 30-40 percent recently while apartment prices are steady.

"The secondary market is steady and there is no more opporunity for speculators," he warned.

The size of the country’s real estate market has grown many times thanks to the entry of huge international capital.

"However, the market is still driven by housing demand from locals," he said, pointing out that the number of foreigners who want to buy a house in Vietnam accounts for only 5 percent of demand.

"Industrial parks are another strength of the Vietnamese real estate market," he said.

Townsend warned that HCM City and Hanoi could face a supply glut because of the massive construction in the last two years.-VNA