• Vietnam Property Guide

Juwai IQI Report: Vietnamese new home prices to surge 7.3% in 2021; investors dominate the market

Updated: Feb 18

Vietnam’s strong GDP growth will help the country deliver new home price growth of 7.3% in 2021, according to the data in the Juwai IQI 2020 Q4 Vietnam Property Index and Survey.

Juwai IQI Group Co-Founder and CEO Kashif Ansari said, “The Vietnamese real estate market is one of the bright spots in Southeast Asia at the end of 2020. Few other markets are performing as well. While Vietnam has not been immune to the triple shock of the pandemic, lockdown, and global recession, it has achieved a stronger position than most of its peers. Using a successful combination of lockdowns, public education, and testing, Vietnam controlled the pandemic and reopened its economy, which is already recovering.

“Vietnamese new home prices are expected to climb 7.3% next year, which is better than other markets in the region. The low levels of new supply in the real market has, to some extent, limited buyer activity in 2020. The outlook for 2021 is good with more supply coming onto the market, and buyers are gaining confidence.

“By contrast with buyers from Thailand and China, Vietnamese prefer to invest in Vietnam. Ninety-three per cent of Vietnamese outbound investment is undertaken for the sake of diversifying investments, while only 3 per cent is motivated by education.

“Thirty-nine per cent of agents expect outbound transactions to grow in 2021.”

Nguyen Thanh Trung, Managing Director of Juwai IQI subsidiary, IQI Vietnam, said, “Investors have by far the largest market share. The accounted for 60% of new home purchases and 67% of used home sales in the first half of 2020. Investors will be even more important in 2021, with more than nine out of 10 in the industry forecasting investors will close more transactions in 2021 than in 2020.

“Foreign buyers are the second-most important buyer group in the new home market and snap up 16% of new homes. Local upgrade buyers account for 13% of new home purchases. First-time buyers account for 11% of new home buying.

“Seventy per cent of the industry believes that foreign buyer transactions will increase in the year to come. We will be post-COVID and trade, travel and real estate will all rebound sharply.

“South Korean buyers are the most important overseas group in the Vietnamese condo market and accounted for 25% of foreign buyer purchases in 2020. Japanese buyers account for 14% of foreign buyer acquisitions, Americans for 22%, and buyers from greater China for 21%.

“Vietnamese buy less international real estate than buyers from some other Asian nationalities, but they still invest a significant amount in cross-border property. Their top destination markets are in the US and Australia, which each account for about one-third of their investment. Europe receives about 23% of Vietnamese cross-border investment, Singapore about 9%, and Canada the remaining 1%. Vietnamese buyers purchasing overseas are overwhelmingly motivated by the desire to diversify their assets.”

Download the full report here

Source: Retalkasia

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