Realty climbs on solid fundamentals

The property market continues to increase in value, as investors respond to real end-user demand Photo: Le Toan

Nguyen Sy Cong, general director of leading construction group Coteccons, said that currently, the real estate market is in quite a good mood. “Stable transactions, reasonable and affordable price changes, the continuous increases in foreign direct investment flows into Vietnam, and the increased number of enterprises in the real estate business are positive factors for the local real estate market.”

A positive sign in the property market is that investors are now more narrowly focused – paying more attention to the real demand of customers. Housing projects are now equipped with different functions as well as combined facilities and services to better fulfil consumer needs.

Moreover, the products offered for the middle class – the most sought-after consumer demographic – have been increasing.

According to a report released by real estate agency DKRA, more than 6,000 mid-range and affordable apartment units were purchased in the year’s first three quarters in Ho Chi Minh City, accounting for 78 per cent of the newly created stock.

Pham Lam, general director of property consultant DKRA, said that in the fourth quarter of 2017, mid-range and affordable housing will lead the market. The second home segment, Lam said, will also see strong sales towards the year’s end.

The positive signs in the real estate market were backed by a solid economy.

According to Nguyen Xuan Thanh, development director of the Fulbright Economics Teaching Programme, the national economy has been on a good track, with many positive signs. “The property market will continue growing in the last months of 2017 and in 2018 thanks to the stability and on-schedule financial policies of the government,” he said.

Thanh said that in the last three quarters, the economy’s growth rate had reached its highest level since 2010.

Government statistics show it was 5.15 per cent in the first quarter, 6.28 per cent in the second quarter, and 7.46 per cent in the third quarter of the year.

“This is a positive sign for the economy, leading toward the planned growth rate of 6.7 per cent for the whole year,” he said.

According to Thanh, local credit growth is also on an upward trend. In the year’s first 10 months, credit growth was 11 per cent higher than it was last year. The growth rate of construction, real estate, and infrastructure systems are at all-time highs.

Thanh also predicted that by the end of 2017, the credit growth rate would be between 15 and 19 per cent.

Meanwhile, deputy general director of HD Bank Le Thanh Trung said that the interest rate – one of the major factors that impact the real estate market – was the brightest sign of the whole economic picture of Vietnam, and it is set to maintain these reasonable levels going into 2018.

In addition, the global economy has been fairly stable, with very few signs of crises in leading economies such as the US, Japan, and the Euro zone.

The exchange rate, Trung said, would be kept stable from now until the end of the year, with the foreign exchange reserves reaching a record $45 billion. “These factors will keep interest rates reasonable until 2018, setting a strong foundation for the real estate market in Vietnam,” Trung said.