Foreign Investment Agency statistics show that nearly US$300 million worth of foreign direct investment (FDI) was poured into the property market in January, accounting for roughly 20% of the total FDI attraction.
Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises, said that the Vietnamese real estate market appeals to foreign investors due to two factors.
|The property market is attractive to foreign investments. Source: batdongsan.com.vn)|
The first one is the growing middle class, which is expected to reach 33 million by 2020 from 12 million in 2012. A series of policies targeted to improve the investment climate and allowing foreigners to own real estate assets in Vietnam also consolidated confidence, Mai said, adding that investments in property assets promises higher returns in Vietnam than in many other countries.
Mai said that the low- and middle- income housing market is catching the eyes of foreign investors due to land use incentives and credit. “This is a good sign,” he said.
According to Phan Huu Thang, former Director the Foreign Investment Agency, many foreign investors and investment funds are eyeing opportunities in the realty market of the country of 90 million population.
“Opening-up policies together with rapid ubanisation are turning Vietnam’s realty market into a destination,” Thang said.
However, Thang noted that attention must be paid to attracting investors of adequate capacity to implement projects, calling this essential to prevent stagnation, which has caused significant losses.
In 2016, foreign investors poured a total of US$1.3 billion into the realty market.