Vietnam has recently experienced a boom in the property market and there is a constant influx of new property companies operating in the country. Many would take this as a sign that Vietnam offers a strong domestic market. Experts, though, argue that this may be far from the case. This kind of rapid growth in the property market without government involvement could lead to a fall out.
Due to strong demand in 2007, several new property companies began operating to meet the needs of the market. To meet the needs of these new property companies, additional companies were born. These included, investment, construction and consulting firms along with securities companies.
For many, the securities companies were a good sign that Vietnam's property market was on solid ground, but industry insiders beg to differ. Investors in securitie companies are different then those that operate property and construction companies. The securitie investors are led by banks and financial groups. They have assessed the region and have an in depth knowledge of the market. Investors in property firms are corporations that do not operate within the country. Several big companies are investing heavily in their own companies but may not have the same understanding of Vietnam's future.
Vietnam does have room for strong growth for years to come, but some intervention by the government will be essential in preserving the market. The region is attracting much foreign interest, but with so many property companies opening, availability becomes an issue. As companies begin to buy and sell properties back and forth, the cost of land will continue to escalate. A rapid escalation in land prices could bring inflation to the region. Government policies and strong infrastructure are needed to keep this from happening. By monitoring the flow of capital into the market, the government could keep large companies from developing monopolies. Without intervention, Vietnam could become a very high risk for investment at all levels.