Vietnam Real Estate Movement Newsletter

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Welcome to the Real Estate Movement Newsletter of Sen Vang Investment Channel. This is an up-to-date information program on the real estate market. And to get started, let’s review some highlights of real estate market in May 2022.  

1, Realcom – Sustainable Real Estate Development Community held an online seminar with the theme “Real estate market development trends 2022 – 2025”  

The workshop gives an overview of the real estate market in 2022 as well as brings a new perspective on resort real estate for investors. 

The program took place successfully with the participation of experts as well as receiving the attention of many organizations and individuals working in the real estate sector, in June the community will return to the program on Project Legal – The notes in the period of 2022 – 2025 promise to bring more valuable information.

Mr. Hoàng Hữu Phê shared on the topic of “Real estate bubble phenomenon” – a prominent issue that is of great interest to investors. 

Next, Ms. Nguyen Thi Bich Ngoc – Founder sen Golden Group, member of realcom’s founding board shared about the section “Summarizing and forecasting real estate trends in 2022“. 

In the third part, Mr. Nguyen Minh Ngoc – Deputy Dean of the Department of Real Estate Valuation of The University of Finance and Marketing expressed his views on the topic “Resort real estate – The trend of land use in household areas in Vietnam according to the trend of the world

Finally, Mr. Ngoc Bui – head of the organizing committee of the DOT PROPERTY VIETNAM AWARDS discusses the topic “Sustainable value of green and smart urban areas in real estate project development“.

2, Property taxes can’t be delayed.

Reportedly, real estate market in the first quarter of this year showed that the price of apartments in localities tended to increase, the average rate increased by about 3% compared to the end of 2021. In Hanoi, apartment prices increased by about 4-5% higher than in Ho Chi Minh City (which increased by about 1-2%) compared to the end of 2021.

In addition, the price of individual houses and land with a higher amplitude than the average apartment increased by about 5-10% compared to the previous quarter.

According to lawyer Truong Anh Tuan – Head of Legal Department of Vietnam Real Estate Association (VNREA), Vietnam’s GDP is low, but land prices are among the top expensive in the world. The real estate market is not following the law of supply and demand.  “Demand is high, supply is low, prices are rising, so the most important issue is to increase the supply of the real estate market. Therefore, I propose that there should be solutions to increase supply in the market,” Tuan emphasized.

In addition, according to him, the real estate market is “hot” because of speculative factors. “I propose that the law on real estate should be constricted to prevent speculation by hitting financial issues such as taxes, fees and technical measures,” Mr_Tuan said.

3, Opening capital flows for Vietnam’s real estate market

According to a study by the Vietnam Real Estate Association, the contribution of the real estate market to GDP in the period of 2019-2021 is about 14%. The real estate market can spread to more than 40 other important sectors of the economy and become a bridge for other markets, contributing to the synchronous development of all kinds of markets and it is important for the market mechanism to work.

According to Vice Chairman of the Vietnam Real Estate Association Phạm  Nguyen Toan , in recent years, the capital sources promoting the real estate market have gradually become richer. However, there are many limitations in the mechanisms, policies, and methods of managing and regulating capital flows for this market. Businesses still depend first and foremost on bank credit.

In this context, the continued diversification and improvement of real estate investment capital mobilization channels should be one of the policy priorities in the coming period.

For real estate enterprises, in addition to credit capital, real estate enterprises need to pay attention and flexibly mobilize capital from other channels such as bond issuance, share offerings to existing shareholders, stock issuance programs for employees (ESOP), treasury stocks, investment funds, construction bonds, financial leases…

4, Vietnam’s industrial real estate: To attract FDI must make a difference

In the recently published report, the Vietnam Association of Realtors (VARs) has commented that industrial real estate is reviving with a wave of investment. 

The resonant factors are helping Vietnam become one of the new destinations of multinational manufacturing enterprises.

Other comments also suggested that foreign investment inflows are shifting sharply, with the China+1 trend changing as China prepares to introduce economic stimulus packages related to tax cuts to boost economic development.

In the real estate market report for the first quarter of 2022, the Ministry of Construction also said that some new industrial park projects approved for investment and implemented in the first quarter of 2022 in the whole country will contribute to supplementing supply for the market in the future.

However, from the perspective of FDI enterprises, Mr. Bruno Jaspaert, General Director of DEEP C Industrial Park Complex, Vietnam does not necessarily need to compete with China, but should make a difference with China.

“Vietnam has a good and stable economy. Vietnam does not need to compete with China and let’s have its own highlights. Vietnam currently has the highest logistics costs in Southeast Asia. So, if Vietnam just changes that, we can completely compete well with China,” Bruno stressed.

5, Overview of Vietnam Industrial Real Estate Forum 2022

Vietnam currently has 260 industrial parks in operation and 75 industrial parks under planning. This shows the level of development that is taking place in both the southern and northern economic key regions.  Compared to Indonesia, Malaysia and the Philippines, Vietnam’s industrial land prices are still relatively low.

The risks are ongoing, providing an opportunity for investors and developers to take advantage of the movements to find opportunities to enter the market. Therefore, Vietnam has the potential to become the leading industrial center in the region, so the industrial real estate market is being diversified at various stages of development. 

Therefore, the Industrial Real Estate Forum 2022 with the theme “REMOVING BOTTLENECKS – RECEIVING NEW CAPITAL FLOWS” today, May 24, co-organized by the Investment Newspaper in collaboration with BW Industrial Company, has attracted great interest of domestic and foreign enterprises such as Ecco, Best Inc,, Amata, DEEP C, VSIP, IDICO, Shinec, Tin Nghia, Sonadezi…, and many press agencies. 

6, Removing bottlenecks, receiving new capital flows from industrial real estate

The sharp increase in land prices, transport infrastructure, and synchronous logistics will be one of the bottlenecks that need to be removed soon to attract industrial real estate investment into Vietnam.

During the Vietnam Industrial Real Estate Forum  in 2022, Mr. Tran Duy Dong, Deputy Minister of Investment Planning, said that in 2021, despite the complicated Covid-19 pandemic, many localities have social distancing but FDI into Vietnam still increased by 9.2% compared to 2020, reaching 31.15 billion USD. New registered and adjusted capital increased; especially expanded investment capital increased sharply by 40.5%. 

Vietnam is a bright spot attracting big brands to increase investment, such as LG, Nike, Samsung, Lego, Pandora … In addition, Vietnam’s manufacturing PMI recorded growth for 7 consecutive months, with 51.7 points in April. E-commerce drives growth expanding into logistics services, delivery endpoints.

However, the speakers said that currently the price of real estate outside is pushing up very high, infrastructure, logistics as well as uneven labor quality is also a big bottleneck to be removed.

This is the end of  Real Estate Movement Program in May 2022. Thank you for your attention. Please Like and subscribe to update the latest information from us. Goodbye and see you in the next program of Sen Vang Investment Channel. Have a nice day! 

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