HCMC real estate market “headache” on the problem of high demand segment supply
Real estate experts said that the high-end real estate market still has a lot of potential for growth. This is the trend of indispensable development of large cities. And Ho Chi Minh City is no exception.
With the general assessment of economic, financial and banking experts. The real estate market in the country in general and in HCM City in particular in the past two years is still in the right direction. Many sources of money both at home and abroad are still flowing into high-end real estate. This enables businesses to have the facility to create new high-end projects for the market.
According to the HCMC Real Estate Association, in the two years 2016-2017 the market has received about 57,000 new products in the new luxury segment.
This leads to the risk of excess supply in the high end segment. But housing for low-income people with lacking’s needs .
In this regard, Le Ba Chi Nhan, an economist, said: “We need to look at the real estate market on a large scale, not narrow at some point.”
And in general, the real estate market of HCMC in recent years has received the attention of many foreign investors.
Evidence for this expert Le Ba Chi Nhan. The flow of money from overseas flows into the real estate market more and more. Housing demand for foreigners in Vietnam in general and Ho Chi Minh City in particular is also very high.
Meanwhile, Vietnam is introducing policies for foreigners owning houses in Vietnam. So in the future, the premium segment will definitely be a worthwhile investment.
Luxury segment is still in the optimistic group of real estate
Property market is well supported by many policies from the government. Along with that, many transportation infrastructure projects link provinces and economic zones. That will create more opportunities for high-end real estate in Ho Chi Minh City.
Many other experts as well as investors still have a very optimistic view on the segment of high-end real estate. Pham Thanh Hung, vice president of CenGroup, said overseas remittances are the biggest motive for high-end real estate.
“Each year, more than 100 million square meters of new housing will be needed so that the market can sustain a high growth rate. Especially recently, there are more loosening laws for foreigners owning houses in Vietnam. “
Which foreigners need housing in our country is very large. It may even account for 50% of transactions in the coming years. And in fact, over 25% of remittance to Vietnam is in real estate.
“Remittances are the driving force and also a great source of demand for the high-end and middle-income segments in Vietnam. In the coming years, the amount of remittances will continue to fall on Ho Chi Minh City market, “Hung said.
Remarkably, there is a huge underground capital flowing into the property. It is the cash flow of idle from the people. Mostly they invest in high-end real estate for rent or for sale.
Typically in the East of Ho Chi Minh City, the rate of customers buying luxury homes for rent here up to over 30%. The number is several times that of other regions. The rate of return in this area is 20% per year.
Economist Dinh The Hien said that. Standing on the whole of the market, businesses say that high-end real estate is one-sided. Because the market has a great demand, new businesses dare to give up such large capital to invest.
Ho Chi Minh City is the largest economic center in the country, the per capita income is higher. So the demand for a luxury apartment is normal. Looking at 5-10 years, the market in Ho Chi Minh City still need high-end apartments
“The most important thing is that the city needs to come up with the most appropriate planning strategy. Zoning to develop high-end real estate in the right place. Every market needs its own market! The problem here is that businesses know how to find the outlet for their products or not, “says Dr.. Hien said.
Foreign investors still see the bright future of high-end real estate in Vietnam
Overall, as seen and appreciated by many real estate professionals. The high real estate in Ho Chi Minh City has great potential for development. Recently, Boston Consulting Group (BCG) said: “The upper and middle classes are growing rapidly in Vietnam.
According to BCG, the “upper and middle classes” with income of $ 714 / month in Vietnam in 2020 will reach about 33 million people. Meanwhile, the Nielson market research firm offers a more positive figure than Vietnam’s middle class population will reach 44 million by 2020 and 95 million by 2030.
This will also be a great opportunity for the property market in the coming time. Observe that there are many foreign investors poured capital into Vietnam. Of which, the high-end segment was chosen the most because they assessed the potential of the HCMC market.
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