Everywhere in the world right now is under a lot of pressure because of the pandemic. As the result of Covid-19, many businesses are falling into bankruptcy. The situation now requires a much more strategic move with innovative ideas to be a survivor out there. Things are on a rough patch and it takes much more than an effort to get out of the slump.
For the real estate sector in frontier markets such as Vietnam, the same difficulty occurs. However, as challenging as it might seem, real estate in Vietnam is still doing whatever it could to overcome this difficult time. It has shown quite a few positive sides along with the negativity. Therefore, the resilience is undeniable and it’s guaranteed to come back much stronger when the pandemic is over.
Real estate outlook in 2020-2021
2020 was a year with many ups and downs. According to Dr. Can Van Luc – Senior consultant of BIDV bank : The first two quarters of the year were a downside to the real estate market in Vietnam, with a lot of crisis going on for the economy causing many difficulties for the country. However, the recovery quickly showed up that lighted up hope for the people involved in the real estate market in Vietnam, when the 3rd and 4th quarter of 2020 constantly displayed the positive side of the picture.
One of the signs was when banks decided to push the interest rate of capital mobilization to the lowest point possible so that the cash flow can easily move to the real estate investment hub.
As 2020 went by, a new journey began in 2021. Since the market had come through such a long adventure in 2020, many real estate companies became more aware of the situation and were flexibly adaptive to the uncertainties of the industry.
From the supply perspective, Covid is certainly a big threat to the real estate market but at the same time, it opens up many opportunities. According to the statistics listed by Batdongsan.com.vn and Apacrealestate.com, Hanoi and Ho Chi Minh need at least 140.000 houses each year. However, the supply has been short since 2019. Therefore, the demands in real estate in Vietnam have never been an issue.
The Big Projects in Ho Chi Minh
Potential districts like District 1 are well-known for their constant city vibe because it’s known as the economic center of Ho Chi Minh City. It attracts tourists to come and enjoy the hybrid look of the city in the past and the modern version of itself. Big buildings and shopping malls surrounded the area which makes the district express its vibration throughout the day.
District 2 shows a lot of potential because of the development of the Thu Thiem area. That’s why it’s known to become the new Pudong, Shanghai of Ho Chi Minh in the future. Also, District 2 is expected to become the new financial center of Ho Chi Minh both domestically and internationally.
The second potential district is district 9, which is popular for its transition location between Ho Chi Minh and Dong Nai. The location has been developed to become an industrial zone and is known to have one of the biggest compounds in Southeast Asia called Vinhome Grand Park.
The Potential of Binh Duong and Dong Nai
The city has become a prominent location for the economy due to its developed infrastructure. Once just a poor town separated from Song Be Province, Binh Duong now has one of the strongest traffic infrastructures in the country. It aims to become an industrial urban, financial center, and the economy lead in the South.
Thanks to the improvement of the industrial zones, the city has attracted thousands of workers over the years. According to a survey in 2019, Binh Duong needed 30,000 – 40,000 additions to its manpower who are experts, engineers, and high skilled workers.
Pretty much having a similar system as Binh Duong, Dong Nai is also the link to the many big cities such as Ho Chi Minh. The traffic infrastructure of Dong Nai is also top-notch, which offers the city a bigger potential in attracting more real estate investors to come.
Also, Dong Nai still has hundreds of hectares of land for the use which is what many real estate investors are looking for. Therefore, the availability of this city has never been a concern.
There has been an upward trend in this category since people began to think of buying a property in the areas where they used to spend their vacation. Ho Tram was the first one to have a branded residences project. It belongs to one of the biggest hotel management companies in the world known as “Hyatt”.
Also, the branded residences report of Graham Associates mentioned Grand Marina – a well-known branded residences project in Saigon, Ho Chi Minh City along with other renowned projects in Dubai, Boston, San Francisco, and London.
The Demands for Manufacturing Lands
This has been a debate for many years since foreign investors started to realize that “The World Factory” has gradually become crowded and soon overloaded. Therefore, they’ve been thinking of diversifying the market and investing more to distribute risks. This trend has grown even more when Covid came and after the event between the US and China. Many big factories have decided to move out of China.
This is the right time for Vietnam to step up and be prepared for the opportunities right in front of it. Firstly, the country has had some great achievements in terms of its Covid defend strategy. Many countries have given Vietnam the prop for the effort of preventing the widespread spread of the deadly virus.