Housing demand will accelerate in 2016

Monday, April 4, 2016     6:05:47 AM

According to experts, the real estate market in 2016 will continue to grow strongly, however, each segment will have the advantage and the ability to separate breakout. Among them, the most notable is the strong recovery of the housing segment.

Recent reports "Around the world in dollars and cents" of Global Studies Division Savills, said: "With the development cycle as opposed to other countries in the region, in 2015, Vietnam's real estate market has remarkable progress compared to many neighboring countries. More than ever, investors and foreign investors are more interested in the real estate market for Vietnam, and this trend will continue this year as well as next year".



The housing market - long-term capital growth

The report from Savills stressed: "The pace of urbanization, household size decreases and young population will continue to drive demand for home ownership in Vietnam in 2016. These economic changes can be considered the main risk in the short term, however, the housing needs of a growing middle class is key to the long-term trend. Housing Act amendments now allow foreign investors to participate in the housing sector, contributing support for the growth of the market that were previously mainly come from domestic demand. "

Segment townhouses and villas in Ho Chi Minh City and Hanoi have strong supply and good absorption rate in 2015. The products are quite diverse, and meet the needs of the buyer.

The reason is because the investor is quite fierce competition for market share and placing on the market of products of villas and townhouses with full-service utility, including the areas of health care and support facilities adult age. This segment also benefited greatly from the improved infrastructure and new connections, helping to narrow the gap of the suburbs with the city center.

Resort - long-term profitability

Tourists come from both Chinese and Russian markets account for about 50% of international visitors to Vietnam. These two countries are not too far distance the city has a long coastline and favorable climate of Vietnam. Hotel market in the country has also developed dynamically in 2015.

Many world-class hotel with an excellent location close to the sea together with high-quality golf course architecture and according to international standards will come into operation in 2016 from northern Ha Long Bay, Da Nang and Nha Trang in Central to Phu Quoc island on the south pole. Surprisingly, more than two-thirds of visitors are domestic tourists.

Property market will continue to utilize and promote the advantages ago, while developing additional resort real estate types. In 2016, the coastal city across Vietnam will welcome many resort real estate projects from moderate quality to world class.

Retail - developing new models

The retail market has developed a fairly active year as investors at home and abroad fierce competition with each other in the rapidly changing environment of this. For the whole 2015, the total value of retail sales of consumer goods and services in Vietnam have increased by 9.5% compared to the same period last year, one of the highest growth rates worldwide.

More active real estate market with the trading and mergers taking place in the retail segment in 2015. In 2016, there will be more space with new retail models such as Takashimaya Building at Saigon Centre (HCMC).

Office - rising rents

Neil MacGregor, CEO of Savills Vietnam said: "The economic conditions have improved impact on the strong development of Vietnam real estate market, along with the growth of urbanization rate, tourism and retail. Savills optimistic about prospects for the real estate market as we see growth in 2016. Investors now focus more on design, landscaping, utilities as well as managed services. "

Demand for offices in Ho Chi Minh City is rising significantly, leading to a shortage of supply in coming years. The office market is expected to have an increase in rents. This will be an advantage for the investors, but detrimental to tenants.

Therefore, tenants are encouraged to have transition plans early before ground rent adjustments. The office market in Hanoi has some signs of improvement, but usually will go after Ho Chi Minh City in the real estate cycle.

"This helps to give the market high-quality projects as well as contribute to increase the confidence of buyers. Vietnam is currently an attractive destination in the region. While countries such as Indonesia and the Philippines are on top of the real estate cycle, Vietnam is currently at the stage of recovery in the last 12 months. More than ever, this time, the investors and foreign investors are more interested in the real estate market for Vietnam, and this trend will continue this year as well as next year. "Mr. Neil MacGregor said.

Author: Vân Hằng / KTĐT