Real estate market in provinces adjacent to Ho Chi Minh City is bustling thanks to foreign capital.

Money flows to areas adjacent to Ho Chi Minh City

According to the General Statistics Office, as of August 31, 2024, the total registered foreign investment (FDI) capital in Vietnam reached 20.52 billion USD, an increase of more than 8% over the same period last year. Of which, 2,247 newly registered projects were licensed with a registered capital of nearly 12 billion USD, an increase of 8.5% over the same period last year in terms of the number of projects and an increase of 27% in terms of registered capital.

Real estate business alone reached 2.4 billion USD, 5.1 times higher than the same period and accounted for nearly 20% of the total newly registered capital. If including newly registered capital and adjusted registered capital, registered FDI capital in real estate business reached 2.55 billion USD, 3.7 times higher than the same period and accounted for nearly 14.4% of the total newly registered and increased capital. Regarding the form of capital contribution and share purchase by foreign investors, investment capital in real estate business reached nearly 812 million USD, accounting for 29%.

Ms. Trang Bui - General Director of Cushman & Wakefield Vietnam also commented that the housing segment is still an attractive choice for both domestic and foreign investors due to its attractive profitability. If 15 years ago, FDI capital only focused on high-end housing with familiar names such as Keppel Land, Capital Land... now, the market has many other new foreign giants joining the game such as Lotte Group, GS, Sumitomo, Hong Kong Land...

With the advantage of land fund, the market of neighboring provinces of Ho Chi Minh City receives a lot of foreign investment capital.

In addition, from the end of 2023 to the first half of 2024, about 16 real estate M&A deals were recorded. The investment goal of foreign investors is still to find clean land funds, good quality, real value as well as complete legal documents, with a lot of development potential. That is also the reason why this large capital flow is pouring into the provinces neighboring Ho Chi Minh City, helping markets such as Binh Duong, Dong Nai, Long An and Ba Ria - Vung Tau become more vibrant with strong growth in both selling prices and interest levels in the recent period.

A recent report by Batdongsan.com.vn shows that in the third quarter of 2024, Chau Thanh and Duc Hue areas of Long An province are the areas with outstanding growth, with interest levels increasing by 19% and 13%, respectively. This is followed by Di An area of ​​Binh Duong with interest levels increasing by 9%.

Regarding the growth in selling prices, Trang Bom and Nhon Trach areas of Dong Nai province recorded price increases of 15% and 16% respectively. Following in the top of price growth in the region are Long Dien and Phu My areas of Ba Ria - Vung Tau with price growth of 15% and 14%.

Many provinces adjacent to Ho Chi Minh City, especially Binh Duong, recorded strong growth in interest and selling prices.

Many M&A deals stimulate provincial market

According to Savills Vietnam, in the second quarter of 2024, there were 3 outstanding M&A deals in the Southern real estate market: Kim Oanh Group (Vietnam) cooperated with NTT Urban Development, Sumitomo Forestry, Kumagai Gumi Co Ltd (Japan) to develop The One World, a 50-hectare residential area in Binh Duong.

Next is the deal in which Electronic Tripod Vietnam Co., Ltd. (Chau Duc) under Tripod Technology Group (Taiwan) acquired an 18-hectare industrial land plot in Ba Ria - Vung Tau from Sonadezi Chau Duc; Nishi Nippon Railroad (Japan) also acquired 25% of shares in the 45.5-hectare Paragon Dai Phuoc Project from Nam Long Group for about 26 million USD.

Most recently, the Japanese joint venture including Cosmos Initia (a member of Daiwa House Group) - a large Japanese real estate group, together with TT Capital Investment Joint Stock Company and Koterasu Group, started the TT AVIO apartment project in Di An, Binh Duong.

Regarding the flow of foreign capital into the Vietnamese real estate market, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that this capital flow contributes to promoting the development of the Vietnamese capital and financial markets, helping domestic enterprises reduce their dependence on bank loans.

Another positive impact of foreign capital is that it helps domestic enterprises have the opportunity to compete, learn, and take advantage of the strengths of foreign investors in project development, branding, and construction technical level. In addition, real estate projects with the participation of foreign capital in Vietnam have established new urban standards in the direction of civilization, modernity, promoting green living space and synchronous utility chains, bringing better living experiences to Vietnamese people.

Source: https://www.congluan.vn/thi-truong-bds-tai-cac-tinh-ke-can-tp-hcm-soi-dong-nho-dong-von-ngoai-post313812.html