VietNamNet Bridge - International experts believe Vietnam and Cambodia are highly desired destination points for real estate investors. There are still many attractive opportunities in emerging markets, despite the economic slowdown worldwide.

 

Vietnam is highly desired destination points for real estate investors.

Why emerging markets, and not other markets? Timo Schmidt from Savills Vietnam, a real estate service provider, said emerging markets can promise profitability rates higher than developed markets, while investment environments are relatively safe.

He went on to say that the growth in many developed markets has been slowing down, which means the expected profits may also be lower. Meanwhile, in emerging markets like Vietnam, the high economic growth rate promises great opportunities for real estate developers.

Is now the right time to pour money into real estate projects in emerging markets? The global economic uncertainties recently have eroded investors’ confidence. However, experts believe that Asia would serve as the motive for the global growth and it would still be the region with the highest growth rate in the world.

Vietnam is one of good choices in Asia for investors. It still can maintain the high growth rate in the last year, according to Stephen Wyatt from Jones Lang LaSalle (JLL) Vietnam.

The Vietnamese stock market has grown by 12 percent in the last year, while the inflation rate is curbed at a low level and the interest rates stay stable at 8-9 percent. In general, the investors’ optimism and confidence have been improved.

What is the Vietnamese real estate market like? Official reports all showed considerable improvement in sales in recent months. The market has warmed up after it bottomed out in the fourth quarter of 2013.

It is now the right time to pour money into real estate projects in emerging markets

Wyatt believes the current selling prices are reasonable. A standard 70 sq meter apartment with two bedrooms which is 10 minutes drive away from HCM City’s center, sells for $1,600-2,000 per square meter. As such, it is $112,000-140,000 for an apartment.

If comparing prices in HCM City with other cities in the region, there are attractive investment deals.

The expert went on to say that investors can expect a profit of 6-7 percent when investing in houses and 9-11 percent when investing in commercial real estate. However, the profits would still depend on the locations, status of apartments and buyers’ negotiations.

Thai Quang Trung, a senior executive of Maybank Kim Eng Vietnam, a securities company, predicted that the government of Vietnam’s recent decision on allowing foreigners to buy houses in Vietnam will “provide one more stable source of capital for the development of the real estate market”.

When to withdraw capital? Wyatt said if investors want to invest in emerging markets, they should hold properties for the short and medium term.


NCDT