FDI inflows will boost Vietnam real estate market

Wednesday - 20/03/2019 05:47
Positive signs of real estate investment (FDI) attraction in the first two months of 2019 are expected to help the domestic real estate market prosper with many new opportunities. 

In Jan-Feb, foreign investors poured capital in 18 sectors, mostly in processing and manufacturing, with a combined volume of $6.93 billion, accounting for 81.8% of total registered FDI. Real estate sector ranked second business with $478 million, making up 5.6% of the total.

The Ho Chi Minh City Real Estate Association (HoREA) said FDI into real estate in recent years has got at a high position. FDI is very important, especially in the context that capital inflows into real estate are limited by domestic banks.

FDI is considered a timely and valuable solution for project developers. Mr. Le Hoang Chau, Chairman of HoREA said FDI not only becomes a supporting source for real estate sector but also creates opportunities and values for real estate businesses.

thi truong bat dong san 2019 khang group

Experts expect the 2019 real estate market to be prosper on the back of FDI

According to economic expert Nguyen Tri Hieu, FDI into Vietnam's real estate market has gradually increased in recent years. Real estate developers from Japan, South Korea and Singapore have been keen on developing projects in city center area or near important transportation infrastructure such as overhead railway, subway,…

On the other hand, many bottlenecks of legal procedures are also continuously removed. This is also a support to the real estate market to receive new investment flows in near future. Currently, real estate businesses have also actively sought out capital to replace bank loans.

Mr. Hieu analyzed: "Some businesses have restructured strongly to list on the stock exchange, and cooperate with foreign investment funds to implement projects. FDI also partly reduces the burden of capital obstruction on local enterprises when banks tighten real estate loans.” 

Experts said foreign investors in Vietnam are divided into two groups. The first group is interested in cash-generating assets such as commercial centers, office buildings, service apartments and hotels located in the central area. Meawhile, the second one focuses on housing development. They coordinate with domestic developers, mainly businesses that have land to build apartments or villas.

According to Jones Lang LaSalle (JLL), FDI inflows of hundreds of millions of US dollars are ready to be poured into Vietnam real estate market. The growth of tourism industry is one of the potentials that attract foreign investors. Last year, the country saw a record of 15.5 million international visitors and 80 million domestic tourists. The tourism industry sets the goal of welcoming 20 million visitors by 2020.

In addition, infrastructure system keeps improving, with 2,000km of new highways, subway systems in Hanoi and Ho Chi Minh City and many expansion or construction projects for airports. Therefore, it is inevitable that investors and developers are willing to pour capital into this high growth market.

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