Vietnam property background Vietnam’s residential property prices continue to rise. The main reason causing this trend are very likely to be both demand and supply are exceptionally low, due to the Covid pandemic. In Q3 2021, the primary stock of apartments plummeted by a huge 70% y-o-y in Ho Chi Minh City and by 27% in Hanoi. It broke the record for the lowest supply level since 2014, A series of new launching events were delayed due to social distancing regulations throughout Q3 2021. Developers strongly applied digital technology to reach out to customers in the state of lockdown. Yet demand is also weak. In Hanoi, apartment sales, as well as sales for villas and townhouses fell by 54% y-o-y in Q3 2021, based on figures from Savills. In HCMC, apartment sales plunged 94% in Q3 2021 from a year earlier, while villas and townhouses sales dropped 79%. These contrary forces are, for the moment, pushing the market up: Ho Chi Minh City Property In Ho Chi Minh City, apartment prices rose by 10.9% in Q3 2021 from a year earlier (8.2% inflation-adjusted), to an average of US$2,683 per square metre (sq. m.), according to JLL Vietnam. Quarter-on-quarter, apartment prices in the city increased 4.4% in Q3 (3.7% inflation-adjusted). Hanoi Property In Hanoi, property prices have been continuously rising, too. The average price of apartments in the capital rose by 9.3% y-o-y (6.6% inflation-adjusted) to US$1,650 per sq. m. in Q3 2021. On a quarterly basis, prices increased 5.8% during the latest quarter (5% inflation-adjusted). The outlook for the property market remains bleak. “It remains uncertain with borders blocked, flights disrupted and immigration limited,” said Savills. “Full recovery might be expected from 2023 onwards, aligning with global vaccination progress.” The IMF forecasts that Vietnam’s economy will grow by a modest 3.8% this year, sharply down from its annual average growth of 6.5% in the past two decades. In Q3 2021, the Vietnamese economy contracted by 6.17% from a year earlier, in contrast to y-o-y growth of 6.57% in Q2 and 4.65% in Q1, amidst stricter measures due to the resurgence of infections, according to the General Statistics Office. The COVID-19 pandemic has seriously affected all aspects of the economy with many key production cities and provinces having to impose strict lockdowns. Foreigners are not allowed to own land. In fact, even citizens are not allowed to own land. In Vietnam, land is theoretically collectively owned by the people, but regulated by the State. Foreign residents in Vietnam are permitted to purchase dwelling houses and can own the house but not the land on which it is built. To know more about the trends and details, you may join the Vietnam Investment Seminar held by overseas agencies, this may help you to make a smarter decision on your investments.
