The Vietnam Ministry of Construction is confident that the country’s real estate market will rebound this year. While the sector declined sharply in 2020, it began to experience a recovery during the fourth quarter. This, coupled with other positive economic signs, should help the industry bounce back.
A Ministry of Construction representative told Viet Nam News that solid fundamentals are currently in place which will allow the property sector to flourish in 2021. The source added industrial real estate is already at pre-pandemic levels and some developers in this sector brought in record profits last year.
That industry will benefit even further with the European Union-Vietnam Free Trade Agreement (EVFTA) coming into effect. Several large multinational corporations already have plans to relocate to Vietnam in the coming months. Additionally, the country’s successful control COVID-19 has made it more attractive to foreign investors.
In the residential real estate sector, momentum from the fourth quarter recovery is expected to carry over into this year. That being said, the ministry official noted there are still challenges facing the property market which developers will need to address.
Home prices in Vietnam predicted to increase
According to the Viet Nam Real Estate Association (VNREA), Vietnam property prices could increase by as much as ten percent in 2021 assuming there is not another lockdown or unforeseen crisis.
“2021 will not have a risk of a virtual crisis or a bubble, but develop sustainably. Infrastructure projects with good business opportunities will become attractive forces. Real estate investment will spread to mountainous areas,” Nguyen Van Dinh, VNREA Deputy General Secretary, was quoted as saying by BizHub. “In addition, the bank interest rates that could be maintained at 2020’s levels will lead to stronger investment stimulus.”
Hanoi is expected to see increases in both residential supply and prices as the real estate market there recovers. CBRE Vietnam research showed that the Hanoi condominium market will add anywhere from 24,000 to 26,000 new units over the next 12 months.
Meanwhile, strong demand in the city will see the average selling price for condominiums in Hanoi rise by 4-6 percent, according to CBRE Vietnam projections.
