Vietnamese market to gain valuable foreign capital

While attention shifts to the real estate market domestically in Vietnam, foreign investment is also set to increase.

Real estate markets can be in a developing stage for a very long time, and usually it takes some sort of catalytic event to propel them to the world's stage. That is how it was for China, the Middle East and even India. Now, it looks as if Vietnam might be getting the catalyst it needs to become a world competitor in real estate and property investment.

The first reason for this is the fact that demand in the Vietnamese property market is increasing, albeit from a very unlikely source. State and national banks in the country are moving their investments into the property market from the stock market, and the confidence in the stock market that move has created has resulted in many property prices rising already. With higher demand from the banks expected to come through, one can expect that trends in that direction will continue.

However, in addition to an increase in domestic demand, the Vietnamese property market has also been the beneficiary of some foreign capital. The Pacific Star Group and the Alony Hetz have signed an agreement with each other that is likely to see over $200 million of foreign investment injected into the Vietnamese property market over the next six months. The Pacific Star Group is based in Singapore and Alony Hetz is based in Israel, showing that international interest in the Vietnamese property market is certainly there.

Alony Hetz, in particular, has had a recent history of success when it comes to property investment. The company was recently responsible for an investment worth $40 million into the Indian property market and the investment turned out very well for everyone involved in the deal. They are hoping to continue that success with this investment in Vietnam.

The bottom line of the situation is that demand and liquidity are both expected to increase and that certainly has the potential to set the stage for a property boom as it has in so many other property markets around the world.