Vietnam’s real estate in 2022 is showing optimistic signals, attracting investors both domestic and international. With a population of about 100 million people, 55% of which is people from 25 to 40 years old, the demand for housing in Vietnam is abundant.
The supply of real estate in 2021 was limited due to social distancing, which, in turn, affected the whole real estate market of Vietnam. The scenery for 2022 is expected to be better, as economic activities are gradually recovering.
The land plot continues to be considered as the leading investment channel. The new supply and demand of the land plot segment in 2022 is forecasted to recover and increase compared to 2021, mainly in provinces such as Long An, Dong Nai, Binh Duong, and Ba Ria - Vung Tau. On the other hand, land plot scarcity in Ho Chi Minh City will remain. In the apartment segment, the new supply can reach about 30,000 units. Supply is predicted to be rising high in Ho Chi Minh City and Binh Duong.
It is expected that in the first half of 2022, new real estate supply and purchasing power may increase slightly. By the second half of 2022, the real estate market will be more active. New supply and liquidity may increase, but it will focus on projects that have good infrastructure, full legal status, and favorable locations. However, it is also necessary to have policies, especially tax policies, public planning, urban development, etc., to eliminate the virtual land fevers.
According to the Vietnam Association of Realtors (VARS), Vietnam’s real estate market will remain at a growth rate of 15% per year and is anticipated to have many prospects in the coming time based on sustainable macroeconomic factors. Vietnam is one of the economies with good resilience compared to many countries in the Southeast Asia region, with advantages in population size and population structure. That is also a competitive advantage that helps Vietnam's real estate maintain a stable growth rate and overcome the hindrance caused by COVID-19.
In 2022, Vietnam's economy is forecast to recover quickly when the economic status changes from pandemic response to pandemic control. The economy will enter a new stage of development. Therefore, the real estate market will also have a new orientation.
In 2021, despite the effects of the pandemic, real estate was still one of the sectors with the highest total value of M&A transactions.
Transactions valued at over 100 million USD are increasing, and domestic enterprises also play a more vital role. In 2022, the real estate market is likely to continue to be active, with many M&A deals taking place. Companies with strong potential will shorten the time to enter the market with each specific project in the context of increasingly limited land funds.
M&A activities help increase supply and liquidity, contributing to creating more excitement for the market. Companies also save time in handling legal procedures, searching for suitable land plots in the context of rising real estate prices.
Contrary to concerns about the bleak M&A situation during the 4th COVID-19 outbreak, the M&A market in the real estate sector in 2021 is still active with a series of large deals when real estate businesses continuously expand the land fund and transfer projects. 2021 is also the year that real estate businesses have very positive business results.
The recovery of Vietnam’s real estate market will rely much on how COVID-19 will be controlled. Optimistic recovery signals shown at an early stage of 2022 in Vietnam's real estate market are filling real estate investors with high hopes.
Source: The Ministry of Industry and Trade