Real estate industry set for influx of foreign cash
Vietnam's real estate industry is expected to attract more foreign investors, even though the domestic economy is forecast to still face challenges this year, according to experts.
Last year, foreign direct investment (FDI) rose 54% year-on-year to US$21.6 billion, of which US$1 billion was from 25 real estate industry projects.
In January this year, the domestic property market continued its trend of attracting foreign investors and experienced the second-largest FDI of US$176 million, which accounted for 45% of the total flow of FDI to the country.
The nation expects to benefit from many projects worth billions of US dollars in 2014 because at the end of last year, many large international groups said they will invest in Vietnam’s property market.
For instance, the Texhong Group from China plans to build an industrial zone in northeastern Quang Ninh province with total registered capital of US$950 million. Quang Ninh also expects the Amata Group from Thailand to develop a US$2 billion high-tech urban region.
The US Rose Rock Group, which specialises in the management, investment and development of luxury properties, has signed a memorandum of understanding to help build a tourist resort complex in Vung Ro Gulf, with potential capital of US$2.5 billion.
In addition, economists stated that Vietnam can benefit from foreign investors who are moving away from China.
The CBRE, one of the foreign property service providers in Vietnam, noted that Chinese FDI will be the largest source of capital for property transactions in Vietnam this year.
Savills Vietnam, another foreign property service provider, also said the company had received many orders from foreign investors in China to undertake property projects in Vietnam.
Deputy Minister of Construction Nguyen Tran Nam remarked that this year the trend of selling part or whole property projects will be boosted to attract more investment to the property industry, which is in need of more investment to recover from the prolonged crisis.
Moreover, part of remittances every year could be put into property projects this year. According to a State Bank of Vietnam report, overseas remittances last year reached US$11 billion, a marginal increase from 2012.