Real estate developers interested in emerging markets

FLC Grand Hotel Quy Nhon in Binh Dinh province (Photo courtesy to FLC Group)

Hanoi - There is a trend of real estate developers moving their investments from big cities of Hanoi and Ho Chi Minh City to other localities, experts have said.

Speaking at a conference on property in 2021 and the rise of new markets held in the central province of Binh Dinh on September 26, Nguyen Van Dinh, deputy general secretary of the Vietnam Real Estate Association (VNREA) said a wave of investment in real estate projects in provinces has become more intense in the past few years.

In the past, big cities were considered “golden land” and the first choice for big real estate developers. Now, more and more businesses are turning to invest and explore new lands.

The reason is that property products in the cities, such as villas and resorts, are increasingly scarce. Property markets in the two cities are lacking land funds, with few products for investment.

“As for apartment products, Hanoi is not profitable because the apartment price has reached its peak. Currently, buyers mainly have demand for accommodation, not for business,” Dinh said.

In HCM City, in the past two years, there have been no new projects completed. Apartment prices have been increasing sharply at an average of 5-7 percent, even 10 percent in some areas. In essence, investors will pour money into a market with good profitability and low prices.

“This was why new markets see strong economic development, including advantages in industrial development and the tourism sector. Excluding areas that have developed tourism real estate, such as Da Nang, Nha Trang and Quang Ninh, the new markets for the tourism industry are the localities that in recent years have taken advantage of beautiful landscapes and good natural conditions, such as Thanh Hoa, Nghe An, Quang Binh and Binh Dinh. We agree that these are the addresses that see new markets,” he added.

For these new markets, he said there were many advantages such as open policies, attracting many investors to pour money into industrial development projects, infrastructure and tourism.

Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn said the statistics have reflected the trend of more interest from investors in new markets.

Earlier, the real estate information searches mainly focused on Hanoi and HCM City. However, in the past two years, searches in other markets have started to increase significantly. For example, in Quy Nhon (Binh Dinh), the number of searches from the second quarter of 2020 compared to the previous quarter increased by 30 percent.

Tran Du Lich, a member of Prime Minister Nguyen Xuan Phuc Economic Advisory Council, said there are two reasons for the move, because localities like Binh Dinh, Thanh Hoa and Quang Binh are developing quickly.

“Major real estate projects have opened up opportunities for many investors. This showed that the emerging market can not rise without pioneering projects and investors,” Lich said.

He added that Binh Dinh province, for example, has paid attention to transport infrastructure in recent years, thus becoming an important factor in attracting investment in the property sector.

Nguyen Tuan Thanh, vice chairman of the People’s Committee of Binh Dinh province, said they have been active in planning to attract investments in many sectors, including real estate.

“We also focus on investing in connecting and building infrastructure. In the past 10 years, Binh Dinh has invested in infrastructure, including airports that are welcoming 10 flights a day for both domestic and foreign tourists, along with a seaport, North-South railway and roads,” he said.

The vice chairman said the locality has opened a number of coastal roads connecting Quy Nhon with other localities to contribute to development of urban infrastructure and tourism. Binh Dinh has attached great importance to urban and ecological environment development.

Improving the lives and quality of life for people is one of the reasons why the province is luring investment from developers.