More Than $300 Million Are Poured In, FDI Real Estate In Vietnam Increases ‘Quality’

It is noteworthy that in January, the real estate did not have a project to register capital adjustment.

There are many predictions that real estate in Vietnam will continue to attract foreign investors for profit potential.

Prof. Nguyen Mai, Chairman of the Vietnam Association of FDI Enterprises, said that in 2016, FDI flows into real estate reached $ 1.3 billion, down 44% over the same period in 2015 and only accounts for 10% of total  FDI in year, slightly down from the same period in 2015 (11.5%).

In the context of the real estate market in Vietnam, it is considered to be growing again, but FDI declines which are not an optimistic signal about the quantity. However, in terms of quality, the projects are generally better and the proportion of FDI capital is higher. It is a positive trend in general FDI attraction and FDI in real estate in particular.

Previously, from 2007 to 2010, although there are many real estate projects with billions of dollars, the proportion of capital performance is quite low, about 25%, some projects are not implemented which has been withdrawn Investment Registration Certificate. From 2011 to now the disparity between registered capital and implemented capital has narrowed much as most FDI projects have shortened construction time. There is a $ 3 billion investment project which only takes about a year from the Investment Registration Certificate is completed and put into operation.

Real Estate

The real estate market in Vietnam is still attractive to foreign investors

As JICA said, Japan helped Vietnam to invest in flood protection projects in HCM City with $ 211 million, which will begin in 2017. Investors will receive a parcel of land equal to their total investment of project to develop 20-storey condominium.

According to Prof. Nguyen Mai, foreign investors are quite quick to Vietnam market. They not only participate in the luxury segment as before but also promote the development of medium and social housing to meet the housing needs of the majority of Vietnamese and building according to the housing standards of Japan, Korea, Singapore.

It is notable that if Japan invested in real estate primarily in the form of financial investment, today some of Japan’s leading real estate corporations invest directly in the project. This would have an impact on improving the high quality of the Vietnamese market, especially in big cities like Hanoi, Ho Chi Minh City, and Da Nang.

Why is real estate market in Vietnam still attractive foreign investors?

In addition to the reasons for the investment environment of Vietnam has improved markedly, creating a comparative advantage over other countries in the region, Prof.Nguyen Mai, there are two factors associated with the real estate market. Firstly, forecasting the middle class of Vietnam increases rapidly in the coming years, which according to HSBC bank is the fastest in Southeast Asia, from 12 million in 2012 to 33 million in 2020.

Secondly, the government of Vietnam for foreigners owning houses is making a difference in the market, especially the high-end segment, because when they invest, they are entitled to a 7-8% rate of return in the market Vietnam, while in their country only 1-2%. This will attract a large amount of FDI into the real estate market of Vietnam, especially projects with good location, design, legal transparency and good living environment.

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