In 2021, despite being heavily affected by the Covid-19 pandemic, Vietnam’s real estate prices recorded an increase of 5-10% in some specific provinces. In 2022, the real estate market is forecasted to have many advantages, with supply gradually recovering thanks to legal easing. Meanwhile, according to VNDirect Securities Company, three factors will drive residential real estate demand in 2022.
First, a broad-based market recovery will help boost the real estate industry next year. The International Monetary Fund (IMF) forecasts that the global economy will grow 4.9% year-on-year in 2022. As an open economy, Vietnam has plenty of room to take advantage of opportunities when Global purchasing power recovers, with the possibility that GDP will increase by 7.5% in 2022.
Second, home loan interest rates continue to remain low, helping to stimulate home buying demand. In the first nine months of 2021, home buying interest rates at domestic banks were relatively stable at 9.2-9.5%/year, the lowest level in 10 years. VNDirect maintains the view that home loan interest rates will remain low, at least until the end of the second quarter of 2022, thereby supporting real estate demand.
Third, promoting infrastructure development will be the driving force for the real estate market to grow in the future. Since October 2021, public investment has gradually recovered stably. The Government may launch new economic stimulus packages to support economic recovery, focusing on increasing public investment spending on transport infrastructure development and social housing. That will become the main growth driver of real estate in the long term.
With industrial real estate, the industrial zone land area in the South is likely to increase by more than 3,500 hectares in 2022 to meet the growing demand in the region, mainly from Dong Nai, Binh Duong, and Long An. Infrastructure is being promoted with upcoming and ongoing projects such as 11 component projects of North-South expressway, Trung Luong - My Thuan expressway, etc.
In addition, ready-built warehouses and factories will continue to attract in 2022, with a series of domestic and foreign investors looking for opportunities to enter this market.
Land plots have been one of the segments hardest hit by the COVID-19 pandemic in the past two years, but products in this segment have recorded a strong recovery in the market.
When the 4th wave of COVID-19 in 2021 broke out, land plots were the segment that witnessed the most severe decline in supply and demand for transactions in the market. However, from the fourth quarter of 2021 up to now, when many provinces and cities began to ease social distancing and prepare to reopen the economy and return to trade, investors' interest in finding land plots has increased. Investment has rebounded rapidly, while many segments are still looking for solutions to recover.
Construction experts predict that the land plots segment may continue to have local fevers in 2022, helping the general real estate market become active again. Vietnam’s land plot market still has great potential for development, especially in areas and provinces with strong infrastructure development and high urbanization rate.
Therefore, in the first and second quarters of 2022, the demand to buy land plots as an asset is still favored by investors and continues to be the top choice segment, especially when the supply in the market declines sharply.
Mr. Neil MacGregor, General Director of Savills Vietnam (International Real Estate Services Group), said that industrial and logistics real estate would continue to skyrocket in 2022. That has been a sought-after segment in the past few years and will continue to grow when manufacturing factories start setting up bases in Vietnam for industrial development.
According to the Ministry of Planning and Investment, provinces over Vietnam will welcome many new industrial development areas in 2022. That creates conditions for the industrial real estate and logistics segment to grow rapidly, especially the market will have growth in distribution of warehouses and services in industrial parks. In addition, since cold storage is also linked with e-commerce, with sellers on e-commerce sites having to find ways to store goods, demand for cold storage will increase.
Regarding the development potential of the market in 2022, experts say that the demand for industrial land and ready-built warehouses continue to be the main demand of the market because Vietnam is currently the target of super large-scale projects.
In 2021, Vietnam's industrial real estate will remain stable in the context of the epidemic, so 2022 will continue to accelerate as the population vaccination policy and psychology adapt better to the disease.
Compiled by VietnamCredit