According to the forecast of most experts, Vietnam’s real estate market will still be attracting cash flow in 2022.
It is forecasted that in 2022, there will be a sharp increase of FDI inflows into the real estate market associated with the recovery of tourism, increasing the trend of restructuring industrial supply chains in the region and the plans to implement large real estate projects across Vietnam.
The cash flow is and will continue to focus on resort products, large-scale urban and coastal cities, as well as in projects with healthy, green environments and well-planned residential areas with various utilities, located near key infrastructure projects, etc.
Mr. Nguyen Hoang, R&D Director of DKRA Vietnam, forecast that how the next year's real estate market will turn out depends on many factors. Two scenarios may happen based on how the pandemic will progress.
In the first scenario, if COVID-19 is well controlled from now until the end of 2021 and in the next 12 months, real estate will gradually recover. In the first half of 2022, new supply and purchasing power will equal the end of this year. It may increase slightly but not too strongly. In the second half of 2022, the market will be more active, new supply and liquidity can grow selectively. Some projects with good infrastructure, full legal status, and favorable locations will have more positive sales than last year. However, Mr. Hoang said that there would be no real estate fever next year.
In the second scenario, if the pandemic situation continues to be complicated, the real estate market may fall into a quiet state like the period from June to September this year because the supply will decrease when the disease is difficult to control. Anti-pandemic measures can make it difficult for investors to organize sales because of challenges such as personnel organization and buyer psychology.
Investors will return to a cautious sentiment, waiting to observe the pandemic progression until the market stabilizes. So, COVID-19 is a very important variable.
"If there will be social distancing is again, even at a lighter level, it will be difficult for the real estate market, the purchasing power will also decrease sharply," Mr. Hoang said.
Vietnam's industrial real estate is still growing strongly despite the pandemic. The prolonged social distancing and restrictions on movement, restrictions on mass gatherings dealt a fatal blow on Vietnam’s industrial real estate.
However, the overall picture of industrial real estate is still in bright colors. FDI inflows into Vietnam are still increasing strongly. Information from the Ministry of Planning and Investment showed that newly registered capital since the beginning of the year had reached over 13 billion USD, additional capital reached over 7.09 billion USD; up 11.6% and 24.2% over the same period last year. FDI capital is helping industrial parks and infrastructure systems, including transport infrastructure, seaport systems, and warehouses, thrive. These are the solid foundational factors that helped promote industrial real estate.
Mr. David Jackson, General Director of Colliers Vietnam, stated that in the context of the complicated pandemic, industrial real estate in 2021 remained vibrant and was the brightest segment compared to other segments in the Vietnamese real estate market. In 2022, this segment will likely continue to shine. The shift of production from China and a series of Free Trade Agreements (FTAs) signed have increased the demand for industrial land across Vietnam. New industrial parks have been planned or built throughout the Northern, Central, and Southern provinces to meet this demand, leading to the booming industrial real estate market in the past time despite the pandemic.
Besides, factory and warehouse services, with the strong growth momentum of e-commerce and logistics services also promise great potential.
However, according to this expert, the Vietnamese market still has some problems to overcome to increase competitiveness compared to other markets in the region, such as infrastructure systems, logistics costs, or some administrative procedures. If these issues are resolved, the Vietnamese market will attract more large investors.
Compiled by VietnamCredit