Increased transparency in Vietnam real estate to yield great returns
Digital transformation strategy to improve the quality and sustainable development of the industry
In a recent interview with Hanoi Times, Vice Chairman of Vietnam Real Estate Association and Chairman of Vietnam Association of Realtors Nguyen Van Dinh said that they have increased their attempts to improve the transparency of the property sector in Vietnam through information technology.
Seeing as investors have had their sights on Vietnam for a while, he believes that the country can benefit from the opportunity as long as they “strongly promote the digital transformation process, market services, involvement of social resources in the management works, and close linkages between regulatory agencies, professional associations, and enterprises.”
Even though the association has improved greatly when it comes to market research in the past few years, he clarified that they have not yet completely taken advantage of 4.0 technology to explore and supply property information.
They consider the introduction of the Real Estate Information System on vars.com.vn as the first stage of their digital transformation strategy to “[improve] the quality and sustainable development of Vietnam’s real estate industry in the coming time.”
Apart from the establishment of the information system, he added several factors that can aid in the improvement of transparency, as well as growth and recovery of the sector, such as economic integration, income growth, infrastructure development, rapid population growth in urban areas, and swift urbanisation.
At present, the real estate sector has shown progress across all segments despite the impact of the pandemic.
Low-cost and luxury residential segments on growth trajectory
Several leading developers in Vietnam have told VnExpress their plans to build more apartments worth VND1 billion (over USD44,150) to control the demand for affordable homes.
Together with a construction material manufacturer and a wood furniture provider, Hung Thinh Corp (its subsidiary Hung Thinh Land Joint Stock Company nabbed the Best Mixed Use Developer title at the 7th PropertyGuru Vietnam Property Awards) have shared their goal to set up an affordable housing initiative in the first quarter of 2022 to cater to the rising demand of low-cost housing for low-income earners.
The prices range from VND25 million per square metre in Ho Chi Minh city and below VND20 million per sqm in the nearby provinces of Binh Duong, Dong Nai, and Long An. Each apartment will cost roughly VND1 billion.
In Hanoi, VietnamPlus reported that 26,000 apartments will be launched in 2022, citing a survey conducted by Cushman & Wakefield.
The launch of luxury condo The Grand Hanoi by Masterise Homes, winner of Best Low Rise Condo Development (Vietnam) and two other categories, were sold out in the first offering, raising the standard prices for the segment in the capital.
The drive of such prominent developers across the country, ushered by award-winning developers Keppel Land (Best Developer), SonKim Land Corporation (Best Luxury Developer), Gamuda Land (HCMC) JSC. (Best Lifestyle Developer), and CapitaLand Development (Vietnam) (Best Sustainable Developer), will lead to the development of better-quality units and further propel the median price of the sector.
More: Full steam ahead for Vietnam’s housing sector
Tech solutions aid in the recovery of the retail market
Deputy director of the HCM City Department of Industry and Trade Huynh Le Minh Tu is confident that the retail market will continue to capture the eyes of foreign investors, due to the rising standards of living across the country and with a population of over 90 million.
He said that the adoption of a multi-platform sales strategy and the advancement of operations and delivery services of foreign retail businesses will improve shoppers’ experience, retain customers, and give them a competitive edge in the market.
The digital transformation in the sector has also prompted the need to upgrade “technological applications for collection, storage, management, and comprehensive data analysis, based on a solid, secure, flexible, and self-operating cloud computing infrastructure.”
Among the solutions implemented by leading retailers are cashless payment options for online and offline shopping, an online shopping site with customisable solutions and product prices for each customer, implementation of a Pick & Go software, and much more.
More: 5G, a breakthrough contributor to Vietnam’s economic growth
Industrial sector remains optimistic
The investment of the public in developing the infrastructure, such as expressways linked to industrial parks, is causing the rising demand for rented land in these parks, said SSI Securities Inc.
In the last quarter of 2021, the documented size of land lease transactions were between three to 40 hectares and land sizes were between three to five ha, according to CBRE. Major transactions registering land sizes of 20 to 40 ha were from tenants in the electronics, logistics, and toy manufacturing sectors.
Both the logistics and electronics sectors made the most deals in the northern and southern regions of the country. Moreover, packaging and solar energy were also active in the north, whereas furniture and medical equipment took over in the south.
Asking rents for industrial parks within one hour from Ho Chi Minh and Hanoi hiked up by 15 to 32 percent, while rents for ready-built factory hubs or new warehouses rose by five to 17 percent.
Within this year and the next, analysts predict the industrial land supply to grow by over 7,000 ha in the north and south of Vietnam.
In the same time period, Standard Chartered Bank forecasts Vietnam’s economy to recoup strongly, flourishing at 6.7 percent and seven percent, respectively, reported The Star.
“The Vietnamese economy is now on a recovery trajectory. In our market research, our clients have told us that Vietnam holds tremendous potential for growth and investment attraction,” commented Michele Wee, the chief executive officer at Standard Chartered Bank Vietnam.
In the next decade, Nguyen shared that the country is predicted to surge more by six to seven percent, seeing as it is one of “the fastest-growing small and medium-sized economies in Asia with advantages in population size, a large youthful population, and a fast urbanisation rate.”
Yet the lack of transparency and regulations in transactions in such an emerging market, particularly with domestic partners, will be deemed risky by local and foreign investors.
Thus, the “criteria to evaluate transparency should include an assessment of the reliability of real estate brokerage services in the market, in addition to standards of valuation and market transaction information,” he concluded.
Know of any outstanding residential, commercial, or industrial projects in Vietnam? Nominate them for the 8th annual PropertyGuru Vietnam Property Awards on or before 12 August 2022. To know more, visit asiapropertyawards.com/award/vietnam/.
Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].
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