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High-End Real Estate Market Developments in Viet Nam.
The real estate market in Viet Nam will see a growing number of property developments which offer quality living environments and amenities as developers are moving to meet the market demand amidst an improved economy.
At a conference about breakthroughs in living standards co-organised by the economic and financial news website cafef.vn and the Viet Nam Real Estate Association on Wednesday in Ha Noi, experts said that home buyers were now more demanding, driven by improved income as the economy was on the recovery path.
The General Statistics Office revealed that the Southeast Asian country’s economic growth reached 6.68 per cent in 2015 with GDP per capita at VND45.7 million (US$2,109) – $57 higher than 2014.
The report “Viet Nam 2035: Toward Prosperity, Creativity, Equity and Democracy” launched in February by the Vietnamese Government and the World Bank said the country would have the opportunity to achieve upper-middle-income status by 2035, given its goal of an average of 7 per cent economic growth per year. Accordingly, GDP per capita per year would reach a minimum of $18,000 by 2035.
The association’s chairman Nguyen Tran Nam said that living environment and amenities became decisive factors for purchase decisions rather than price as previously.
“The recent crisis of the realty market helps buyers hold the upper hand,” Nam said.
He added that the protracted stagnation eliminated developers that had weak capacity and forced those remaining to meet home-seekers’ demands, which would benefit buyers.
“We, home-seekers, now have abundant choices,” said Trinh Hao, who came from Hai Phong to work as an engineer in Ha Noi.
“I prefer locations with good connectivity, plenty of green space for walking and fresh air, schools for kids and supermarkets. This will make life more enjoyable as people become more and more busy.”
According to Tran Ngoc Chinh, chairman of the Viet Nam Urban Planning and Development Association, urban living quality must be improved with high-quality planning focusing on technical and social infrastructure as well as green space density amid the country’s rapid urbanisation.
“Developing property projects with green living environments coupled with comfortable amenities appears to be an indispensable trend,” Chinh said, adding that many property developments in Ha Noi and HCM City were following the trend such as Time City, Ecopark, Ciputra and Phu My Hung.
The trend would be set towards smart, green and sustainable urban development with environmentally-friendly designs, modern amenities and energy-savings, Chinh said.
Le Khac Hiep, deputy chairman of Vingroup, developer of Vinhomes housing projects, said that the development of townships which integrated green space, technical infrastructure and social amenities were changing the face of Vietnamese urban development and driving the realty market towards enhancing living quality for citizens.
In a recent report, property service firm CBRE Viet Nam said luxury and mid-level apartments were dominating the market in the first quarter of this year with shares of 48 per cent and 36 per cent, respectively.
The real estate market, since entering a recovery period last year, saw many new property developments offering not only quality living standards, but also investment opportunities, like condotels, shophouses and resort townhouses and villas.
Experts said at the conference that macroeconomic stability was making real estate an attractive investment compared to gold or foreign currencies, and many property developers were grasping that opportunity.
Regulations to come
While living in apartments was becoming more popular in major cities and the development of this market segment will be a focus of the Government till 2020, it’s time to set standards to classify property developments to define their market values, experts said at the conference.
According to Nguyen Manh Khoi, deputy director of the Ministry of Construction’s Department of Housing and Real Estate Management, the Law on Housing 2014, coming into effect in July 2017, stipulated that Government agencies would be in charge of “starring” apartment buildings, instead of developers as before.
The construction ministry was drafting a circular about the classification of apartment buildings which was drawing mixed opinions. According to the draft, the stars would be A B, or C based on criteria including architecture, infrastructure, construction quality and management service quality.
Khoi said at the conference that the circular would be issued in May and will have a great impact on both buyers and property developers.
The circular was expected to help clean up the property market through preventing developers from exaggerating the quality of their projects and by encouraging them to develop projects with quality living environments.
A representative from property service provider Savills Viet Nam said that when building townships property developers must pay attention to developing the technical infrastructure to meet the requirements of residents, ensure an ecological environment and provide professional management services for the sake of the community.