The real estate market in Vietnam has been growing rapidly over the past decade. With its strong economic growth, political stability, and favorable investment environment. Vietnam has become an attractive destination for both domestic and foreign investors looking to invest in real estate. In this article, we will compare Vietnam’s real estate market with other Southeast Asian markets.
Overview of Vietnam Real Estate Market
The Vietnam real estate market has been one of the fastest-growing markets in the region. According to the Vietnam Real Estate Association, the total value of the real estate market in Vietnam reached $46 billion in 2021, an increase of 7.6% from 2020. The market expects to continue to grow in the coming years, driven by urbanization, rising incomes, and a growing middle class.
Residential Properties
Residential properties are the largest segment of the Vietnam real estate market, accounting for more than 80% of the market’s total value. According to CBRE Vietnam, the average price of a luxury apartment in Ho Chi Minh City was $5,518 per square meter in 2021, an increase of 19.6% compared to 2020. This is higher than the average price growth in other Southeast Asian markets, such as Thailand and Malaysia.
Office Properties
The office property market in Vietnam has also been growing rapidly. According to JLL Vietnam, the total supply of Grade A and Grade B office space in Ho Chi Minh City reached 2.6 million square meters in 2021, an increase of 7.5% compared to 2020. The average rental rate for Grade A office space in Ho Chi Minh City was $41 per square meter per month. Which is lower than other Southeast Asian markets such as Bangkok and Jakarta.
Retail Properties
The retail property market in Vietnam has been growing rapidly, driven by the country’s rising middle class and increasing consumer spending. According to Savills Vietnam, the total retail space in Ho Chi Minh City reached 1.2 million square meters in 2021, an increase of 10% compared to 2020. The average rental rate for prime retail space in Ho Chi Minh City was $137 per square meter per month, which is lower than other Southeast Asian markets such as Bangkok and Kuala Lumpur.
Industrial Properties
The industrial property market in Vietnam has been growing rapidly, driven by the country’s strong manufacturing sector and favorable investment environment. According to CBRE Vietnam, the total supply of industrial land in Ho Chi Minh City and neighboring provinces reached 9,390 hectares in 2021, an increase of 5% compared to 2020. The average rental rate for industrial properties in Ho Chi Minh City was $2.8 per square meter per month. Which is lower than other Southeast Asian markets such as Bangkok and Jakarta.
Foreign Investment in Vietnam Real Estate Market
Foreign investment in Vietnam’s real estate market has been growing steadily in recent years. According to a report by JLL Vietnam, foreign investment in the country’s real estate market reached $2.2 billion in 2021, accounting for 24% of the total investment in the market. The majority of the foreign investment came from Singapore, Japan, and South Korea.
Comparison Vietnam Real Estate Market with Other Southeast Asian Markets
When compared to other Southeast Asian markets, Vietnam real estate market is still relatively young. But it has been growing rapidly in recent years. The average price growth for residential properties in Vietnam is higher than other markets such as Thailand and Malaysia. However, the average rental rates for office and retail properties in Vietnam are lower than other markets such as Bangkok and Jakarta.
In terms of foreign investment, Vietnam’s real estate market is still smaller than other Southeast Asian markets such as Singapore and Thailand. Which have more established and developed real estate markets. However, Vietnam real estate market has been growing at a faster pace. And foreign investment in the market has been increasing steadily.
One advantage of Vietnam’s real estate market is its relatively low cost of investment compared to other Southeast Asian markets. The average price of luxury apartments in Vietnam is still lower than other markets such as Singapore and Bangkok. That makes it a more attractive destination for foreign investors looking to invest in the luxury residential market.
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Helen Nguyen (Ms.)
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