Real estate investments are making waves as more developers and investors shift their focus from urban centers to suburban areas, particularly around Vietnam's major cities. This trend is driven by rising land prices and the increasing demand for affordable housing.
According to the latest report from the Vietnam Association of Real Estate Brokers (VARS), real estate actors are rapidly accelerating their investments from city centers to surrounding provincial areas. Investors are attracted to these suburbs primarily because they still offer substantial land availability and improved transportation infrastructure.
The surge of investments outside major urban centers is not merely coincidental. The primary motivation stems from skyrocketing property prices, achieving record highs, making it increasingly challenging for investors, especially those with limited financial resources, to sustain profitable operations. VARS notes, 'Investors are accelerating their flow of capital toward areas with lower land prices and higher growth potential.'
Consequently, the government and local authorities are intensifying urban planning initiatives to develop satellite cities and expand urban spaces. This effort is meant to alleviate population pressures on city centers and open up attractive opportunities for both individual and corporate investors.
Many personal investors are gravitating toward suburban areas where land prices remain reasonable and growth potential is significant. They are focusing their efforts on acquiring properties such as landed houses, commercial townhouses, or new urban projects at affordable investment values. VARS explained, 'Many medium and small businesses are actively seeking to accumulate clean land for project deployment.'
The investment surge is also fueled by improvements to transportation infrastructure. Highways, beltways, and metro systems are dramatically reducing travel time between suburban areas and city centers. This not only adds value to real estate but also plays to the growing demand for suburban housing. Increasingly popular are mixed-use urban areas, or 'all-in-one' projects, which are sprouting up on the outskirts. These projects develop surrounding areas economically and can significantly increase property values.
Investors are adopting long-term strategies. Rather than focusing on short-term gains, many are accumulating land, anticipating future growth as infrastructure continues to be completed. Besides residential projects, the demand for second homes, farm stays, and suburban vacation rentals has surged, particularly after the COVID-19 pandemic spurred interest in green living and remote work arrangements.
This trend poses significant openings for real estate developers of all sizes. Several major players have recognized this opportunity, launching large-scale urban projects within these suburban locales. Projects like Aqua City in Dong Nai, Izumi City in Bien Hoa, and Vinhomes Ocean Park in Hanoi stand as prime examples of this strategic shift to accommodate new demands.
For medium and small-sized real estate businesses, the suburban market isn’t just another possibility; it is increasingly becoming the necessary pathway forward. Due to tightening regulations on land use and rising development costs, many can no longer compete effectively within city centers.
Experts are noting how many real estate companies are now intentionally pursuing clean land accumulations outside of the centers to tap convenient investment conditions and ample growth potential. This newly available supply, meeting the rising demand for housing, significantly stimulates the local suburban real estate market. Besides residential properties, there's been considerable expansion within industrial real estate, spurred by global supply chain shifts and regulatory support.
With increasing populations in these satellite cities, the demand for shopping malls, multifunctional complexes, and office spaces is also on the rise. This demand provides more avenues for real estate firms to expand their investment portfolios.
VARS anticipates the growing shift outward will come to define future real estate investment trends. Investing within city centers may only be apt for those possessing strong financial capabilities seeking long-term asset accumulation.
Conversely, some suburban areas offering good planning and developing infrastructure remain relatively 'cheap,' with significant price appreciation potential. There is particularly high demand for housing outside city centers.
Government incentives and policies are also acting as catalysts for investors. That said, the experts caution potential investors to conduct thorough research and evaluations before committing. Planning issues, land use rights, and legal procedures can challenge the investment process.
While the opportunities are vast, not all areas generate sufficient consumer interest, and some still lack the necessary public services, which can inhibit attracting residents and investors alike.