Vietnam's real estate market is undergoing a significant transformation as investors increasingly turn their attention away from central urban areas to the suburbs, spurred by soaring property prices.
Recently, the Vietnam Association of Real Estate Brokers (VARS) noted this trend, indicating a shift where individual and corporate investors are accelerating the diversion of their investment capital to regions where land prices remain more affordable and growth potential is high.
Historically, the focus has been on short-term gains from central urban properties. Yet, as prices reach record highs, many investors are reconsidering their strategies. "The central property market is no longer feasible for investors lacking strong financial capabilities," says Nguyễn Văn Đính, President of VARS.
Alongside rising prices, investors are increasingly exploring innovative solutions like second homes, farmstays, and resort complexes, which not only promise good returns from rental income but also attract interest due to changing buyer preferences.
The factors driving this shift are manifold. High property prices combined with increasing construction costs are making investments difficult to justify within city centers, especially with many central projects encountering legal challenges and extended implementation times.
Investor focus on the suburbs is seen as not just beneficial, but almost necessary. With effective government policies promoting satellite urban planning and enhancing infrastructure, areas surrounding major cities like Hanoi and Ho Chi Minh City are becoming attractive investment targets. Currently, infrastructure investments such as highways and metro systems are shortening travel times between suburban areas and urban centers, creating substantial added value for real estate.
Experts predict significant growth for the property market by 2025, with key infrastructure projects coming to completion, including the new T3 terminal at Tan Son Nhat Airport and the completion of Ring Road 3, anticipated to open doors to previously overlooked sub-markets.
According to industry specialist insights from Nhà Tốt, the current environment, especially with interest rates remaining low, provides favorable conditions for homeowners and investors alike. This scenario will likely bolster purchasing power and help mitigate the financial pressure stemming from increasing construction costs.
VARS indicates demand for housing remains strong, with almost 69% of recent transactions accounting for real use as opposed to speculative or short-term moves. This reflects the public's shifting preferences toward real, sustainable living areas.
Analyzing the battleground for potential investors, the report highlights the advantages of enhancing property development along major transportation lines and strategic plans leading to optimized land and liquidity across suburban districts.
"Investments will mainly flow to areas embraced by good planning and product development, where land prices are still relatively low," added Nhà Tốt's analysts, expressing confidence about the future of suburban developments.
Nonetheless, potential investors must navigate various legal matters tied to urban planning and land use rights. Even with promising developments, not every suburban area guarantees strong returns or sufficient amenities to attract homebuyers and investors. This emphasizes the necessity for diligent research and comprehensive evaluation of investment possibilities before committing finances to projects outside central hubs.
Nguyễn Thế Điệp, Vice President of the Hanoi Real Estate Club, stressed the importance of nurturing these transformations within Vietnam's real estate sector. He notes, "The shift of investment to suburban areas is inevitable, so we need to create conditions and incentives for these projects to thrive, providing strong momentum to the real estate market by 2025."
Looking forward, the outlook on Vietnam's property market appears optimistic as the government continues aiming to alleviate pressure on central urban areas through urban satellite development and infrastructure support. By 2025, the interplay of these factors will set the stage for extensive opportunities, ensuring resilience and continued growth across various segments of the real estate market.