Real estate in Việt Nam attractive to FDI, foreigners

The Long Hậu IP in Cần Giuộc District, Long An Province. — VNA/VNS Photo Minh Hưng

HÀ NỘI — Real estate has emerged as the biggest recipient of foreign direct investment (FDI) in January while foreigners now also have great demand for property in Việt Nam, statistics show.

As much as US$1.27 billion of FDI was poured into real estate in January, accounting for 53.9 per cent of the total registered capital and doubling the figure recorded in the same period last year, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

With this result, real estate ranks first in FDI attraction after a long time standing at the second place, after the processing – manufacturing sector.

Notably, the FDI flow into Hà Nội has continued surging thanks to a new residential area project worth over $662 million, the FIA reported.

Besides, there is also great demand for real estate in Việt Nam among foreigners as shown in the Vietnam Institute of Real Estate Studies (VIRES)’s recent survey of 500 large investors from 10 associations of property businesses and investors in such developed real estate markets as the US, the Republic of Korea, and Singapore.

It found that the top reason for foreign investors’ interest in Vietnamese real estate is attractive prices.

However, VIRES held that the country still needs to further improve the legal framework and access to information and data to provide the best possible conditions for foreign investors in this sector.

About 10.5 per cent of the interviewed investors assessed the property market and prices in Việt Nam as very attractive, 47.4 per cent said the market and prices are very attractive but improvement is needed in terms of legal, information and data conditions, 21.1 per cent relatively attractive, and 15.8 per cent moderately attractive. Only 5.3 per cent said the market and prices are not truly attractive.

Among real estate segments, foreign investors are most attracted to middle- and hi-end apartments. About 57.9 per cent of them said they are interested in buying while 36.8 per cent want to rent those apartments.

Demand for purchasing and renting tourism and resort property is also relatively high, at 26.3 per cent and 31.6 per cent. Only about 5.3% of foreign investors have demand for renting and buying industrial park real estate and renting commercial offices, the survey found. — VNS