Vietnam property market shows signs of recovery

by News Desk

The real estate market is confident that prices will recover after a long cycle of decline in both HCM City and Hanoi. In the capital city, nearly 400 not-yet-built apartments in Keangnam Tower were sold not long after construction on the building started.

Lots in the Van Phu Urban Area and Xa La high-class apartment projects in Hanoi s newly-merged Ha Dong city have also been magnetic to investors, and prices have gone up nearly 20 per cent since Tet. Last year, investors paid little attention to these and other projects, as land prices were on a
heavy decline.

Moreover, property around these projects has also been selling like hot cakes.

One of Hanoi´s hottest realty projects is the Van Khe Urban Area, located next to the popular traditional silk craft village of Van Phuc, Ha Dong.

In just a few weeks, land prices in the area skyrocketed by nearly 30 per cent against the third quarter of last year. Many investors regretted selling so early, when land prices were still relatively low and bank interest rates too high.

In HCM City, the markets significant fall over the past year has helped balance supply and demand, prices are now at a more realistic level; apartments have become significantly cheaper.

Apartments in Van Do, for example, which is several minutes away from the centre, are now going for 20 million VND (US$,1140) per sq.m; they were at 30 million VND per sq.m before the decline.

The 40 per cent price drop of the Hoang Anh Gia Lai apartments has also caught investors attention.

Pundits are saying that while the securities market plummets, the prices of gold and dollars are fluctuating unpredictably, moreover, bank deposit rates are too low, and the real estate market has become a safe and modestly profitable option for idle capital.

Another positive factor is that the prices of construction input materials such as steel, cement and brick have also been going down.

The real estate market is seeing several favorable factors that hint at a recovery such as lower prices and bank interest rates.

Despite the improvements, many investors are still concerned that tax increases related to transferring real estate, in accordance with the Law on Personal Income Tax and Trading of
Property that was recently amended, will take effect soon and send the market into another slump.