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“In 2018, Real Estate Investment Returns To Around 20% Per Year”

Profits of real estate investment

Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association, said that the real estate market in 2017 showed that the supply and demand were relatively balanced, the market was a “play” for investors… In 2018, profitability for investors will also become more reasonable.

Vietnam property market continues to flourish in the past 9 months. Looking at the dynamics of investors, especially foreign capital inflows into Vietnam market, what do you think about the next movement of the market in the remaining months of 2017 and 2018?

The property market from early 2017 has a stable growth. Investors are no longer caught up in the “hot fever” or loss of liquidity as some years ago.

The amount of investment capital, especially foreign direct investment and indirect investment through joint ventures, acquisition of project shares … increased sharply. In particular, the amount of money spent on the acquisition of projects up to hundreds of millions of dollars. This fact shows that the Vietnamese market is very attractive in the eyes of domestic and international investors. In 2018, the market will grow stronger when many big projects will be accelerated by investors.

Profits of real estate investment
Mr. Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association

In each specific segment, there are concerns about overcapacity in the supply of land, condominiums or vacation properties. How do you see this?

Those who monitor the market may notice, in the past 3 years inventory stocks in all segments are down continuously. Real estate inventory in the country is now more than VND20 trillion, down nearly 80% compared with the first quarter of 2013 (more than VND101 trillion).

In the context of new projects being launched, inventory has dropped by nearly 80% compared to the beginning of 2013. This proves that the demand of the market is still very strong. The developments in each particular segment are different, but residential real estate projects have been put into use. Only a few projects without infrastructure, misidentification customer segmentation or planning at the inappropriate position to continue inventory.

Particularly with real estate tourism resort – segment has a strong breakthrough from 2015 to now, can confirm that the current supply is low, missing, not excess, especially in the high-end segment. With the strategic orientation of the Politburo and the Government on the development of tourism into a spearhead economic sector and the actual growth in tourist arrivals to over 30% today, the potential for resort property is very large.

The problem is that investors need to know the right place, investment and investment in a professional way, for sustainable development. In addition, the State should step up the legal corridor for resort property policy to follow closely and have positive adjustments to the market.

Housing Law, Real Estate Business Law 2014 has officially allowed foreigners to own houses in Vietnam but after more than 2 years of law, the number of foreigners officially own houses in Vietnam is modest… Is there any way to increase this rate, sir?

After nearly 2 years of implementation of the Housing Law, the Law on Real Estate Business 2014, only about 1,000 foreigners own houses in Vietnam. This is too little. The reason is that because we do not want to increase this rate.

Profits of real estate investment
In 2018, profitability for real estate investors will become more reasonable

The policy for foreigners owning houses in Vietnam is “making it difficult” for people in need while still very lacking and incomplete. If there is enough commitment to reform some basic procedures in certifying transactions, issuing certificates of home ownership, residence, visa … then we can increase this rate, there are no problems from the market.

Currently, housing prices tend to fall to match the needs and affordability of middle-income and low-income people. In your opinion, what should investors consider when investing in this segment?

  1. Hanoi, HCMC has a number of low-cost commercial housing projects that meet the needs of low and middle-income customers. This also contributed to lowering average house prices to a more appropriate level. However, the number of housing projects of this type is too little while the demand is very large. If investors have clean land at reasonable land prices, investing in affordable housing is a promising investment, contributing to solving social problems for large cities.

What are your forecasts for investing in real estate in 2018?

In 2018, real estate prices may increase as inventories are basically out. If you do a new project, the business must do from the beginning. Especially, in the context of an increasingly competitive market, real estate developer’s profit will be reasonable, about 20% per year.

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“In 2018, Real Estate Investment Returns To Around 20% Per Year”
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