Vietnam real estate market set to boom

Mr. Dang Hung Vo, Deputy Minister of Natural Resources and Environment
The real estate market in Vietnam is set for a revival this year with foreign investment flowing into it, experts have predicted.

Dang Hung Vo, Deputy Minister of Natural Resources and Environment, said with WTO membership and the US’s approval of normal trade status for Vietnam, more foreign direct investment would flow into the country.

Investors were likely to switch from the stock exchange, that had been buzzing over the past year, to the property market by the second quarter, he said.

Other experts said the saturation in the Southeast Asian markets would make Vietnam a lucrative option with its rapid urbanization and demand for housing and offices outstripping supply.

There is growing interest among foreign investors in infrastructure, urban development, housing, and resorts.

Do Thi Loan, general secretary of the Ho Chi Minh City Real Estate Association, said decrees issued by the government to guide implementation of the Investment and Housing Laws had created a transparent legal framework for investors.

The Real Estate Trading Law, set to take effect early this year, would contain more liberal provisions.

Tran The Ngoc, director of the HCMC Department of Natural Resources and Environment, said the key change in the Investment Law was that the government had freed up access to the financial market.

Projects take off

Several old projects in downtown HCMC resumed construction late last year after years of delay.

These include the US$156 million Saigon Pearl commercial complex and the $220 million Kumho Asian Complex.

Recently, Pacific InDe Corp., a US property firm, unveiled plans to develop office and apartment projects in HCMC and elsewhere in the south.

It also plans to set up a US$50 million fund for investment.

Malaysian property developer Prima Line Horizon Sdh Bhd has yet to invest in Vietnam but is scouting out property projects.

In Hanoi, in December alone property projects worth $4 billion were announced, many of them large-sized – like the South Korean-invested $314 million Tay Ho Tay Urban Area.

Improvements needed

Vo said it was necessary to have transparent and stable policies for real estate financing and to create a level playing field for domestic and foreign investors.

Both domestic and foreign credit institutions should accept land mortgages and earmark more funds for the real estate market.

Housing and land laws should remove existing restrictions on land transactions and have detailed provisions on buying and selling property projects.