Vietnam's real estate market is heating up, with property transaction volumes rising rapidly in the last few years. Vietnam’s GDP growth in 2017 hit a 10-year high at 6.81%, resulting in higher FDI inflows. In the same year, newly registered FDI increased by 44% with ~17% directed to the real estate market. A surge in housing demand is being driven by the need of ~375,000 housing units per annum and high rates of urbanization in Ho Chi Minh and Hanoi at 4% and 3.8% respectively.
Mid- to high-end condominiums make up at least 70% of property supply in Vietnam. However, sales are not keeping up. Apartments are becoming too expensive for residences in the two cities and can cost up to VND 30-60 million per sqm. The imbalance of supply and demand may result in a potential real estate bubble. To mitigate the issue, the State Bank of Vietnam has begun putting credit-restrictions in place.
This infographic highlights key drivers behind Vietnam's rising property transaction volume, surging supply in high-end condominium segment, and how Solidiance can help in case a potential bubble arise.