Survey shows confidence in Vietnam real estate markets

Real estate agents in Vietnam’s two biggest cities are optimistic about property prices with almost half believing they are set to see a mini boom in coming months.

A survey by research firm Vietnam Report, shows that 43% of agents in Hanoi and Ho Chi Minh City said that real estate prices in big cities would surge, while the rest said they are likely to remain unchanged.

The report, Vietnam’s Real Estate Market in 2009 and prospects for 2010, also shows there is confidence among buyers.

Over 61% said they planned to buy properties to live in while 11.5% said they would do so for short term investment purposes and 27% as a long term investments.

Up to 43% of consumers said they expected the property supply in Hanoi to grow but just 28.6% in HCMC.

Villas are expected to see prices increase more than apartments with 72% of surveyed firms believing that the apartment market would not change much in the short term.

Most realtors said middle range apartment prices would rises slightly as cities modernized and expanded.

It is estimated that 29.2 million people in urban areas and 62.2 million people in the countryside will need property in the next few years.

Land prices in urban residential areas, especially suburbs, are expected to rise sharply in the short term, according to the report.

Nearly half of the surveyed firms and a majority of the experts also anticipated that the office for lease market would decrease in the short term due to the impact of the economic downturn.

However a new report from property consultants Savills Vietnam indicates that the commercial rental market is near bottom.

‘The worst is over for landlords,’ said director Brett Ashton, adding that a balanced market would soon return.

He predicted that Grade A rentals would start to increase in early 2011 at a steady pace and the Grade B rate would take longer to recover because of ample supply.

Ashton added that residential market has already picked up in Hanoi and Danang and called for developers to pay more attention to design as buyers were getting smarter and being choosier.

‘Developers need to understand who they are building for, the market, and competition. Selling has been more difficult,’ Ashton said.