Vietnam’s Residential Real Estate: A Flourishing Market Through Pandemic Adversity
In 2021, Vietnam’s positive GDP growth remains resilient against the global health crisis, with the residential and construction sector leading like never before. Even though the rest of the world has been hit hard by the COVID-19 pandemic, Vietnam has had the least impact, with less than 3,000 reported cases and <50 deaths, out of a total 96 million people. Through their fortitude, the building of new residential properties has skyrocketed.
How Vietnam is Leading the Real Estate Market
It is astounding how the country has been able to achieve a steady stream of milestones this year given the health and economic hardships the world is facing, especially in residential real estate. During this same tumultuous period, Vietnam shattered its Asian competitors with a GDP growth of 2.9%, their greatest feat yet, in the face of global adversity. As a result, Vietnam’s real estate market has flourished, with continued economic growth leading to a surge in real estate prices.
How Swift Political Action Supports Vietnam’s Flourishing Economy
This is all thanks to the government’s swift and comprehensive response to close Vietnam’s schools, borders, and businesses in order to save its citizens from the outbreak, and they were one of the first countries to do so.
Once quarantine restrictions were lifted in May 2020, over a year ago now, the country was able to quickly get back to a fully functioning internal economy while the rest of the world remained in lockdown. For the real estate market, this meant reopened factories and resumed construction, which surged the market forward into optimized growth, especially against its neighboring competitor countries, who are still focused on managing the outbreak.
As a single-party socialist republic, Vietnam has been recognized time and time again for its impeccable political and economic growth over the years, even beyond the pandemic. According to The Country Watch report, Vietnam exhibits a high level of political stability with an average political stability index of 4.5 in 2019.
A Closer Look at Vietnam’s Real Estate Growth
Vietnam’s housing market has seen unprecedented growth in recent years. Investors’ demand for apartments consistently exceeds the supply of units, with many new developments selling out shortly after sales launch. According to Cushman & Wakefield, Vietnam’s apartment prices have grown by a staggering 90% between 2017 to 2020, including by 12.8% in 2020 alone.
Despite increasing prices, new investment areas are becoming made available by new infrastructure factors, and in large-scale development areas such as Long Bien and Gia Lam districts. Regardless of the pandemic and price surges, major developers are bringing more focus to affordable housing, providing good quality at good prices in the right locations.
Along with domestic investors, foreign investors have been a major factor in pushing the real estate market as well. As such, the country’s economic progress coupled with a rapidly expanding middle class are the primary demand drivers for the expanding housing market, with few signs pointing to a slowdown anytime soon.
Vietnam is Setting the Real Estate Industry Standard
For Vietnam, demand is clearly not an issue. Rather, it’s keeping up with it and creating more sustainable operations that enhance real estate growth and economic prosperity.Beyond its notable growth, Vietnam is also focusing on creating long-lasting, sustainable properties.
As Vietnam’s industrial sector continues to build more properties, developers are paying more attention to creating a cleaner and safer environment for the residential community, focusing on more “green” factors, like health, living environment, air quality, and convenience of transportation. With consistently increasing growth, building for sustainability is only logical, and optimizes Vietnam’s prosperity for years to come.