The following are forecasts for the 4 main trends of Vietnam's real estate market in 2023:

1. ATTRACT FOREIGN CAPITAL

Vietnam is a rare bright spot in attracting the world's real estate capital flows when policies to attract FDI inflows are more and more open. Lotte Group (Korea) has started construction of a complex of nearly 1 billion USD in Thu Thiem Urban Area, marking an important milestone in the plan to completely withdraw from the Chinese market to focus on other potential markets. Vietnam is considered an important destination of this shifting trend.

With a population of nearly 100 million people, of which 50% are under the age of 35, Vietnam is facing a housing shortage, creating strong growth opportunities for this market. The demand for infrastructure development and strong urbanization to meet the world's highest economic growth rate has had a positive impact on the psychology of foreign investors. In the period 2021-2030, the urban population is forecast to continue to increase. The urbanization rate increases gradually, reaching 40.91 % in 2025 and 44.45% in 2030.

2. INDUSTRIAL REAL ESTATE BENEFITS

The trade war, the pandemic has disrupted the global supply chain and sounded a wake-up call for corporations to diversify production locations and limit dependence on one country.

“As Chinese labor becomes increasingly expensive and US policy towards the country remains unpredictable, companies are willing to move some production out of China. That trend will continue to accelerate as Vietnam and India gradually improve their competitiveness,” said Dan Wang, technology analyst at Gavekal Dragonomics.

Up to now, in industrial parks and economic zones nationwide, there are nearly 11,000 valid FDI projects with a total investment capital of up to 230 billion USD... “Cleaning the nest to welcome the eagle” has continued to be a hot spot of the real estate market in recent years and this trend will continue in 2023 and the following years. A typical example is the story of technology corporation Foxconn. The world's largest contract electronics manufacturer announced an investment of about $300 million in Vietnam. Foxconn's new factory is expected to be built on an area of 50.5 hectares in Quang Chau Industrial Park in Bac Giang province, creating 30,000 jobs. In Binh Duong, the famous Danish game maker Lego announced a $1 billion project, making Vietnam a global production hub.

3. SOCIAL HOUSE DEVELOPMENT DEMAND

Narrowing the phase difference in supply and demand, making the dream of home ownership of the majority of people more feasible, the Government and the business community are preparing the project "Investing in building at least 1 million apartments in in society for low-income people, industrial park workers in the period of 2021-2030".

Real estate companies have entered this segment. Vinhomes announced a project to build 500,000 Happy Home social housing houses in the next 5 years, priced at less than 1 billion VND in second-class localities. Hung Thinh Group also participates in the race to develop social housing with a plan to build 150,000 apartments for low-income people. Novaland Group commits to build about 200,000 apartments, Him Lam commits to build 75,000 apartments.

4. HOUSE PRICE GROWTH SLOWS, THE MARKET IS MORE SUSTAINABLE

The Ho Chi Minh City Real Estate Association (HoREA) assessed that affordable house prices (about 2 billion VND) in Ho Chi Minh City are about 20 times higher than the average income of society, while house prices in industrialized countries development is only 6-7 times higher than income.

In the coming time, the market may face many difficulties when the Government is planning to tighten capital flows into the real estate market through tightening bank credit channels and issuing corporate bonds. The highly speculative segments, who own a lot of property, are expected to suffer more from controls such as property taxes. Small investors with thin capital will also be purified, leaving the playing field for reputable brands with better potential.

Source: Nhip cau dau tu