The good momentum of Vietnam’s real estate market is likely to continue into 2017 across all segments given a brighter outlook of the country’s economy, Jones Lang LaSalle (JLL) Vietnam has said in a note.
For 2017, both the Vietnamese government and the World Bank
expect the local economy to grow faster than in 2016, based on expectations regarding the continued growth in manufacturing and services sectors, and the recovery of the agriculture sector amid the a reasonably promising outlook for the international economic situation.
FDI flows into Vietnam, in terms of both disbursement and newly registered capital, increased on an annualized basis in 2016, showing that Vietnam is an attractive investment destination for foreign investors.
This positive sentiment is set to continue into 2017, thanks to the country’s advantages of economic and political stability over others in the region, its continued efforts in entering into a number of bilateral and multilateral treaties and the improving business environment of a number of large economies, said JLL Vietnam
“Vietnam’s [property] market will witness another strong year in 2017. The economy is performing well and is considered one of the best performers in Southeast Asia. We expect to see considerable activity in all sectors of the market with positive focus on low-mid end residential in cities, the Ho Chi Minh City office market, hospitality and industrial.
Based on the considerable number of enquiries we are receiving from both foreign and domestic investors, we expect M&A activity will be a record year in 2017,” Stephen Wyatt, general director of JLL Vietnam, commented.
Reviewing the local residential market in 2016, JLL said that both Ho Chi Minh City and Hanoi
reported a very strong year, with multiple new highs recorded in all facets of the residential market.
Total new launches of apartments in the two cities reached more than 70,000 units last year, and total units sold amounted to more than 67,000 units, a significant improvement over the last few years.
In line with the positive sentiment in both demand and supply, prices remained on the uptrend across all the markets in 2016 and this trend will continue in 2017.
JLL said the retail for lease market in 2017 will continue to see improvement, in terms of increased footfall and revenue in existing developments, an increase in the number of new retail center openings and new international brand entries, and the expansion of existing retailers.
“This is expected to be in line with the growth in residential supply, infrastructure and middle-class income. The new year is likely to experience intense competition between local developers and foreign investors, and of bricks-and-mortar retail versus online shopping,” it forecast.