Foreign capital is heading to real estate
According to the 2023 Socio -Economic Situation Report of the General Statistics Office, although the real estate market experienced a difficult year, 4,725 new real estate enterprises were established nationwide throughout 2023. In addition, 2,081 real estate businesses returned to operation, equal to 109.1% compared to 2022.
In addition, real estate is still an attractive sector for investors, ranking second in attracting foreign investment capital. Data from the Foreign Investment Agency - Ministry of Planning and Investment also shows that as of December 20, 2023, real estate business attracted nearly 4.67 billion USD, accounting for more than 12.7% of total registered investment capital, up 4.8% over the same period.
Foreign businesses pay much attention to large markets such as Ho Chi Minh City and Hanoi .
Despite the difficulties of the real estate market, the number of newly established enterprises and the number of enterprises returning to operation increased; as well as FDI capital flowing into real estate ranked second in attracting foreign investment, showing that real estate is still a popular investment channel.
A survey by Cushman & Wakefield Vietnam also shows that international investors are interested and have very positive responses to the investment potential in Vietnam. This is because Vietnam is a potential market with attractive profit rates.
This is also demonstrated through recent major M&A deals in the real estate market with international brands such as Hong Kong Land, Frasers Property, Mapletree, Daiwa House, Nomura, GS,...
Besides residential projects, industrial and logistics real estate also has outstanding appeal, thanks to the development of manufacturing and export, e-commerce, transportation and warehousing.
FDI capital is also flowing strongly into industrial zones.
The manufacturing and processing industry also accounts for a large part of total FDI capital, leading to many businesses being interested in Vietnam as a new destination for expanding production from China in the Southeast Asian region. In particular, the interest of European and American countries in the Vietnamese real estate market is also increasing.
Is 2024 a good time to invest?
Commenting on the market, Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, said that at the end of 2023, in many sales events organized by investors, the number of investors and interested customers attending and visiting increased significantly.
Although it is not yet possible to confirm whether the number of visitors is proportional to the number of buyers, the fact that investors are attending and the reality of the project shows that the opportunity to sell and the need to buy real estate products still exist. This need will be clearer in 2024.
Sharing the same view, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, assessed that 2024 is a challenging year for the real estate industry. However, these challenges also open up great opportunities for the real estate market to accelerate in the coming period.
Signs of momentum for acceleration appeared as early as the end of 2023 when many large-scale projects were launched on the market, contributing significantly to promoting transactions and diversifying supply sources.
Many opinions say that 2024 is the right time to invest in real estate.
The Chairman of the Vietnam Real Estate Brokers Association emphasized that the launch of projects at the end of the year shows that the real estate market is on the path to recovery. Along with that, the State's macroeconomic policies and legal framework are also supporting the development of the market in the coming time.
This will be the premise to create a runway for the real estate market to take off in 2024. Therefore, in 2024, investors see a good opportunity to take advantage of the "bottom" of the market to choose and buy the most satisfactory real estate at the best price.
However, according to Mr. Neil MacGregor, CEO of Savills Vietnam, the biggest challenge for real estate investors in Vietnam at the moment is administrative obstacles, especially in resolving land use fees.
At the same time, investors are now being very careful about the legal ownership of the project, ensuring a clear roadmap to obtain the necessary approvals from the Government. Settling land use fees and approving 1/500 planning are the most important factors for housing development projects.
As a result, there are few projects with clear legal ownership and all the necessary approvals for development, which more or less leads to difficulties for investors to participate in the market.
"The changes in the legal framework have not been fully implemented, so local authorities are still hesitant in the implementation process. Typically with condotel products, many local authorities are still hesitant to grant certificates to projects despite clear explanations in the legal framework," said Mr. Neil MacGregor.
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