In the first five months of this year, the registered capital of newly licensed real estate projects reached US$623.3 million. Including the registered capital of licensed projects from previous years, foreign direct investment (FDI) in real estate business in Viet Nam reached $806.5 million, according to the General Statistics Office.
Foreign investors often invest in Viet Nam property in three main ways: capital contributions, share purchase and capital investment loans.
Most of these investors choose the high-end real estate segment when entering the Vietnamese market because in this segment, they have the biggest advantage. According to many experts, foreign enterprises often come from more developed real estate markets, so they have more experience in the design, development and operation of high-end real estate.
Su Ngoc Khuong, investment director at property services firm Savills Viet Nam, said the presence of foreign investors is a trend in the real estate market today.
The real estate market in Viet Nam is very attractive to foreign investors, not only in terms of profitability but also in terms of economic growth, Government policies for foreigners in terms of owning houses in Viet Nam and incentives for foreign investors, Khuong said.
According to Savills’ representative, these investors will bring to market their experiences in project development. On the other hand, they also help to increase competitiveness, improve business activities and product performance in the market, bringing more benefits to consumers.
2,600 new property firms established
During the reviewed period, there were 2,600 real estate enterprises newly established. On average, each day, up to 17 enterprises in real estate sector were newly established.
Experts evaluated the growth of the market along with the profit of a large number of real estate brands and investment capital from foreigners poured into Viet Nam are the driving forces for real estate companies to „grow as mushroom“.
The situation of property market from the beginning of this year until now showed that real estate companies have aggressively entered the market to gain market share, especially in the red-hot fields such as land and real estate resorts.
Assessing the real estate market in 2018, Tran Kim Chung, deputy director of the Central Institute of Economic Management, said the profits from real estate business are very high. „If they spend one Viet Nam dong in the real estate market, they will get 1.5 to two dong in returns,” he added.
This is also the cause of the increasing number of newly established real estate businesses on the market currently.