It is expected that even with companies such as South Korean property firm Daewon actively constructing projects in Vietnam that demand will continue to outstrip supply until at least the end of the decade.
While Vietnam's capital city of Ha Noi is experiencing a lull in the real estate market following the Lunar New Year holiday, there is some concern regarding the current state of business, however many are simply continuing to operate in business as usual fashion.
"Muted sales have been prevalent not only in central Ha Noi but also in Ha Tay, which has long been the most saleable area," stated an employee from Thang Long Real Estate. General consensus is that many property investors usually take extended breaks lasting through to the end of February and resume activity in March.
Even with the current lag in sales over the past two weeks, many hold the opinion that the real estate market in Vietnam will continue to be in strong demand until 2010. General director Mark Townsend, of CB Richard Ellis Viet Name expressed this same opinion earlier this week. While there are several large scale projects currently under construction, only one new development is scheduled to open later this year. "The pressure on retail location is causing rental prices to increase," Townsend said, with an expectation that the average rents for retail space may reach $200 per square meter per month for 2008.
In regards to more supply coming online Townsend stated, "Since last year the country has seen the start of many important projects. In two to three years, when these projects are complete and made operational major market changes will occur." Highlighting the global credit crunch, gold and oil prices reaching record prices, and problems in the U.S. with the sub-prime market and the dollar falling against the British pound and the Euro, he added, "At the moment, the real story for property will be driven by global economic conditions."
While the Vietnam property market appears to be growing steadily, the government is also planning on implementing regulations in order to curb and control the property market. According to Vu Van Ning, Minister of Finance, "First, we must keep real estate credits healthy. Activities that boost supply such as increasing office and apartment spaces should be encouraged, but lending merely for speculation must be restricted."