Steady macro economy bodes well for property market

Hanoi (VNA) - Economists said the domestic real estate market is benefiting from stable macroeconomics.

The average consumer price index gained 0.63 percent in 2015, the lowest recorded since 2001. Likewise, home loan interest rates stayed low, encouraging the realty market to thrive.

According to the State Bank of Vietnam, credit growth stood at 18 percent last year, compared to between 12 and 14 percent recorded for 2012-2014. Despite a slight rise after the US Federal Reserve (FED) deciding to raise interest rates by 0.25 percentage points in early December 2015, Vietnam’s interest rates are projected to be stable throughout 2016.

These factors have brought realty investors a higher profit than the return made by their peers who invested in foreign currencies, gold or bonds.

Experts from the CBRE Vietnam believe the country will continue this growth based on its international connections. The trend has been reflected in increasing overseas capital being channelled into Vietnam, and with the growing number of free trade agreements between Vietnam and foreign partners. Meanwhile, the newly formed ASEAN Economic Community will contribute to boosting Vietnam’s competitiveness regionally and internationally.

These positive market occurrences will help local property market gain ground, particularly in the housing segment, noted Tran Ngoc Quang, General Secretary of the Vietnam Real Estate Association.

In 2015, Vietnam recorded 22.7 billion USD worth of foreign direct investment (FDI), 10.5 percent of which was poured into real estate. As such, the realty sector was ranked third in terms of FDI with the funds coming to 34 new and 12 existing projects.-VNA