Experts at the International Real Estate Federation (FIABCI) Asia Pacific conference in HCM City are optimistic about the development of the real estate market in Viet Nam.
Matthew Koziora, sales and marketing director for VinaCapital Real Estate, said yesterday the country had excellent growth prospects and an administration increasingly open to foreign and private sector investment.
"Many multinational companies apply the China-plus-one strategy and Viet Nam is increasingly the alternative as China becomes a more expensive place to operate," said Koziora.
Though Viet Nam is not immune from the global credit crunch and foreign direct investment (FDI) disbursement could slow, its improving balance of payments, and solid foreign reserves are strong indicators that a currency '"meltdown" is unlikely, according to the director.
Meanwhile, given the current credit slowdown in Viet Nam caused in large part by the Government's monetary tightening policy, foreign investors have the opportunity to fill the gap.
According to Koziora, real estate will continue to be in high demand due to increasing industrialization and urbanization. Low to mid-range apartments are selling because of their affordability and reasonable payment terms as well as a real demand.
HCM City now has 150,000 sq.m. in 15 shopping centres and departments stores, but does not have enough "purpose built" retail facilities.
Around 50,000 expatriates currently live in HCM City but only 3,000 serviced apartments are available. More units should be available by 2010. With international visitors on the rise, the city also faces a shortage of hotel rooms. There are currently fewer than 7,000 rooms in three to five star hotels. In the first six months of the year. 2.3 million foreign tourists came to HCM City. Some 4.5 million foreign arrivals are expected this year.
Do Thi Loan, HoREA secretary general, views the area's rising population, with 85 percent of people living in urban areas, as an opportunity for residential investment projects. She also cited Viet Nam's peak position in the world's 10 most attractive retail markets as another encouraging condition for real estate development.
Truong Trong Nghia, president of the Investment and Trade Promotion Center, pointed out the Government's targets for 2020 of turning HCM City into a metropolis of 10 million residents, characterized by hi-tech industries, high end services, and science and technological facilities as room for growth. The Government also plans to increase the average housing area from the current 11.5 sq.m to 17 sq.m per person.
He also cited projects awaiting investment, such as creating new urban centres in Thu Thiem and Cu Chi and expanding Tan Son Nhat Airport to allow 10 million passengers in 2010 and 20 million in 2020, as signs for optimism.
At the ongoing two-day conference, hosted for the first time in Viet Nam by the HCM City Real Estate Association (HoREA) delegates will discuss: international property transaction trends in Asia, developing low-cost housing, financing for housing developers and buyers, lessons from Singapore and Indonesia, and prospects for condo hotels in the Asia Pacific region, among others.
Source: Vietnam News