The latest report of Vietnam Real Estate Association (VNREA) expected higher prices on the domestic market due to market and economic factors.
The 2015 real estate market report released by VNREA predicted that this year, real estate prices would rise by 5 – 10% over last year.
The impact of the Vietnam economy together with the return of investors to the market will lead to a more vibrant market with stable development in 2016, said the report. This recovery will result in prices being continually adjusted with a rise of 5-10% in the coming time.
real estate prices would rise by 5 – 10% this year
According to General Secretary of VNREA Tran Ngoc Quang, the domestic economy is now entering a new growth cycle with good indicators. For example, GDP growth was estimated at 6.5-7% and inflation remained under 5%, while credit activities were solid throughout 2015.
Along with the effects of the amended Law on Housing and Law on Real Estate Business, the State Bank of Vietnam’s raising interest rates will also add heat to the real estate sector. Besides, the effectiveness of the central bank’s monetary policy as well as the development of infrastructure will generate sustainable macro-economic development in the long run, said VNREA.
However, long-term risks including exchange rate issues and the budget deficit still threaten the growth. Notably, exchange rate issues raise some concerns with 2-3 devaluations forecasted this year.
The report also expected the mid-range segment would dominate the 2016 market. Meanwhile, the lower-price segment would continue to grow. However, there would be no significant increase in transaction volume because of its dependence on assistance from the Government.
Since most Vietnamese people prefer landed houses to apartments, the villa and townhouse segment is predicted to continue to see positive changes and meet the significant demand of the market. In addition, the segment also benefit from the infrastructure improvements and more favorable connections to city centers.