Vietnam's real estate market is drawing international investors at a rapid pace, noted Nguyen Anh Tuan, deputy director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, at the recent seminar hosted by The Investor.
Vietnam's real estate sector stands as the second most attractive industry for foreign investment, trailing only behind the manufacturing and processing industry.
To date, the country has attracted over 37,500 projects, amounting to a total investment close to $450 billion. Of these, 1,100 projects were real estate investments, amounting to $66.4 billion, or 15 per cent of the total foreign investment.
International investors from 48 different countries and territories have poured money into Vietnam's property market, with leading investors hailing from Singapore, South Korea, the British Virgin Islands, and Japan. Out of the 45 provinces and cities that received foreign direct investment (FDI) in real estate, Ho Chi Minh City leads with a registered capital of over $16 billion, accounting for 24.7 per cent of total investment, followed by Hanoi, Binh Duong, and Ba Ria-Vung Tau.
Foreign firms investing in Vietnam's real estate sector are predominantly large-scale entities, noted Tuan, with projects ranging in diversity and quality.
Several FDI ventures have investments amounting to billions of USD, including projects such as the Ho Tram in Ba Ria-Vung Tau, the smart city in Hanoi, and the Nam Thang Long Urban Area in Hanoi, among others.
A range of factors is enticing foreign investors to Vietnam, including political stability, impressive economic growth, competitive manufacturing costs, a rich labour source, potential market opportunities, and a strategic geographic location that enables connections to large economies.
The country's extensive coastline offers prime locations for resort property development, coupled with an infrastructure system benefiting from robust investment.
Despite these advantages, foreign-invested real estate projects in Vietnam face issues of inefficiency. Some large-scale land projects have suffered from sluggish implementation, while the complexity of administrative procedures concerning investment, construction, bidding, and land use often results in prolonged project execution. In particular, the legal system related to the real estate market is seen as not yet harmonious, clear, and adequately responsive to changes.
The Ministry of Construction has been leading the drafting of amendments to the Housing Law and the Real Estate Business Law. The Vietnam Real Estate Brokers Association recommended swift adjustment of foreign investment policies to keep pace with global economic fluctuations and changes in other countries' FDI strategies.
