Illustrative photo (Source: VNA)

Hanoi (VNA) – The real estate sector saw 840 new enterprises established in the first two months of this year, 5.3 percent of the country’s total new firms during the period.

Economic growth coupled with high demand for property products has drawn capital into the Vietnamese real estate market.

Matthew Powell, director of property company Savills Hanoi, said the market is on foreign investors’ radar.

He added that many of Savills Hanoi’s customers, particularly those from Japan, the Republic of Korea (RoK), China, Hong Kong and Singapore, have sought information on investment in Vietnam.

He anticipated the market would record more new transactions this year.

In 2018, foreign direct investment (FDI) poured into property projects exceeded 6.5 billion USD, 21.3 percent of the total FDI. The figure pushed real estate to the second place in the ranking of biggest FDI earners in Vietnam. Most of the capital came from Japan, followed by the RoK, Singapore and Hong Kong.

According to insiders, while foreign companies enter the market by buying projects that have already operated for quick profits, domestic firms focus on merger and acquisition deals to develop more projects serving housing, production and investment demand.     

The thriving sector has also attracted several companies from other sectors. This has led to a high number of registered projects but a low construction completion rate due to weak financial and management capacity of contractors. Other problems include fraud and soaring land prices.-VNA