Real estate in 2020: What is the most popular product?

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Experts forecast that in 2020, tourism real estate will be the product with the best growth potential.

Prospects fortourism real estate

Commenting on real estate trendsin 2020, some experts agree that the bright spots in the medium and long term will be tourism real estate, affordable housing and industrial real estate.

Speaking at the Vietnam Real Estate Forum held recently, Mr. Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association, said the real estate market in general and tourism real estate in particular are witnessingstabletrends and have seen many positive signals in recent years. In 2020 and the medium term, the market will continue to develop stablyand positively.

“It is forecasted that, in the medium term, with over 20 million international visitors to Vietnam each year, the average vacation time of 5-7 days for each vacation and domestic tourists ofabout 85 million people with vacation time of 3-4 days, so Vietnam will need tens of thousands of luxury rooms,”Mr. Nam said.

Mr. Nam said that affordable housing and industrial real estate have great opportunities because Vietnam is constantly developing and becoming one of the destinations to attract investment in the manufacturing industry in Southeast Asia.

Regarding real estate trends in 2020, Deputy Minister of Construction Le Quang Hung said that there may be an increase in land prices in planned areas to become special zones and new urban areas with synchronous investment in technical and social infrastructure.

Not only in the land plot segment, Deputy Minister Hung also said that in 2020, it is forecast that a local hot point will occur in some housing projects in the urban center area with fast construction progress, synchronized floor, reputable investors and reasonable prices.

In terms of businesses, expert Vo Huynh Tuan Kiet, Deputy Director of CBRE Vietnam, said that in 2020, the mid-end apartment segment is expected to continue dominating the market with many new products from urban areas.

By 2020, the Hanoi market will continue to be an attractive destination for retailers and developers due to high GDP growth and a young population. Specifically, in 2020, there will be five new retail projects, providing additional supply to the market with about 156.000 m2 from FLC Twin Tower, Hinode City, Vincom Megamall Ocean Park, Vincom Megamall Smart city and The Village (Park City).

Scarcity of supply

The next segment that is expected to grow strongly in 2020 is social housing and low-cost housing. According to calculations by the Ministry of Construction, by 2020, the country needs to build about 700,000 apartments to meet the housing needs for low-income people in urban areas throughout the country.

However, according to statistics of the Vietnam Association of Real Estate Brokers, by the end of the third quarter of 2019, the real estate market still has a downward trend, especially in the two biggest citiesof Hanoi and Ho Chi Minh City. Specifically, in Ho Chi Minh City, there wereonly five new projects compared to the figure of 20-30 newly opened projects on average in previous years. In Hanoi, experts forecast that the apartment price increase in 2020 may be over 10%.If the shortage continues, the real estate market in Hanoi will face arisk of a serious supply shortage in 2021.

Mr. Nguyen Van Dinh, General Secretary of the Vietnam Association of Real Estate Brokers, said that in 2020, the real estate market is forecasted to facecertain obstacles, including the fact that supply is limited this increases real estate prices. At that time, there were little opportunities for the poor to access housing policy.

Besides, according to MrDinh, the legal obstacle is not new, but in 2020 it will continue to be an obstacle forthe real estate market. “The pressure from the State to review, inspect and tighten licensing for new projects and projects showing signs of non-compliance with the law makes state management agencies slow in approving of new investment projects and construction permits,"said the General Secretary of Vietnam Real Estate Brokers Association.

Commenting on the supply of the real estate market in 2020, Mr. Neil MacGregor, General Director of SavillsVietnam, said that the supply of the market depends heavily on the State's policy approval, allowing deployment building and perfecting new projects. However, it is also difficult to predict exactly when market supply policies will be relaxed.

Five opportunities in Vietnam’s real estate market Despite facing difficulties and challenges the Vietnamese real estate market is developing stably positively and professionally

Concerned about scarce supply, Mr. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, also affirmed that in all real estate segments today, the housing segment in big urban areas is the reasonable choice in the context of lack of supply and prices rising sharply. “I think that in 2020, the price of apartments will increase by 20% if the supply gap situation is not resolved. In 2020, investors in housing real estate can gain high profits,"Mr. Vo said.