Remittance plays important role in enhancing real estate sector’s liquidity: experts

Hanoi (VNA) – Remittance is an important factor in enhancing the liquidity of Vietnam’s real estate sector, as the amount of the money flowing to Vietnam in the recent years has continuously increased, according to market watchers.

In 2016, due to the influence of the presidential election in the US, the amount of remittance to Vietnam was only 9 billion USD, a level less than expected. But in 2017, the figured recovered to 13.8 billion USD, up 16.8 percent over the previous year, making a new record height. In Ho Chi Minh City alone, remittance the same year hit 5.2 billion USD, a rise of 4.5 percent year on year.

Statistics from the State Bank of Vietnam, Ho Chi Minh City branch, showed that in the first half of this year, the amount of remittance was estimated at 2.45 billion USD, up nearly 20 percent over the same period in 2017. Of the total, the majority came from the US with over 60 percent, and Europe with more than 19 percent.

As many as 72 percent of the remittance was poured into production and business, 22 percent into real estate, and 6 percent for personal spending. As a result, each year, the real estate sector receives about 2.5 billion USD, helping improve the market’s liquidity.

Real estate firms held that the millions-strong Vietnamese community in the US and Europe and Asian countries with high demand for housing when they retire or returning the homeland for working and investing makes the market section targeting overseas Vietnamese (OV) attractive.

The branch predicted that the remittance to Vietnam in 2018 will increase about 20 percent over 2017.

Real estate firm Savills commented that the broadened legal framework also makes OV customers a more promising group.

However, many experts asserted that although real estate for OVs is attractive, products for the group remain few.

A survey by Savills Vietnam suggested that along with basic aspects such as location and prices, major factors of foreign customers and OVs’ interest while investing in Vietnam’s real estate include safety, security as well as added services following transactions.

Considered as a newly-emerging and promising market, Vietnam is a favourite destination for OV investors. In order to optimise the capital and remittance, in particular in real estate, experts held that it is necessary to ensure the transparent and safe development of the sector.-VNA