Vietnam’s property market expected to continue growth trend
Vietnam’s three-year run of growth in its residential property market is expected to continue in the short term, according to a survey conducted by FT Confidential Research (FTCR), a research service of the UK's Financial Times.
Illustrative image (Source: VNA)FTCR data show that would-be buyers are more confident about making purchases in Vietnam than most other ASEAN countries amid optimism about rising prices.
The fourth-quarter survey found 8.5 percent of Vietnamese saying they planned to buy an apartment this year, equivalent the ratio in the Philippines but significantly higher than in Indonesia, at only 2.6 percent.
According to FTCR, Vietnam Property Price Expectation Index increased to 85 points in early 2017 from under 50 points in early 2013.
This indicates the recovery in Vietnam’s residential property market, which emerged three years ago from a bank debt-fuelled downturn, has some way to run.
An improved environment for bank lending, along with low inflation, strong gross domestic product growth in the past two years, rising incomes and rapid urbanisation - at roughly three percent annually - have contributed to investment from developers and homeowners.
In addition, liberalisation of the market for foreign buyers in 2015 - in particular allowing a quota-based system for ownership in certain residential segments - helped produce an unprecedented level of foreign investment in the country.
FTCR said total investment in the field accounts for 7 percent of the total 24.4 billion USD of newly registered foreign direct investment into Vietnam in 2016.
In addition, there are several differences between the current cycle and that of the mid-2000s boom that suggests this is more sustainable. Much of the demand from buyers is for end-use, while most developers are dedicated property companies focused on mid-end segments, it noted.
The Vietnamese market is expected to remain on an upswing, particularly relative to other markets in the Southeast Asia, it added.
FTCR is an independent research service from the Financial Times, providing in-depth analysis and statistical insight into China and ASEAN member nations.-VNA
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