At "Hanoi residential property market towards 2017" seminar, held on Jan 12, a panoramic picture of Hanoi residential property market in 2016 was recreated through presentations and reports. On that basic, Mr. Nguyen Manh Ha - Deputy Chairman of Vietnam Real Estate Association (VNREA) pointed out the opportunities and challenges of the market in 2017.
According to Mr Ha, in 2017, Vietnam property market has many advantages for development. Firstly, rapid urbanization, young population and improving macroeconomic situation of Vietnam in 2017 are prerequisites for the housing market’s growth. In Hanoi, the high speed of urbanization makes a strong growth of the middle class, promoting the market development.
In 2017, the amended Law on Housing encourages foreign investors to boost investment in Vietnam property market. The foreign investment poured into Vietnam market will generate positive changes for all segments, especially residential segment.
Mr. Nguyen Manh Ha - Deputy Chairman of VNREA said Hanoi residential
property market would face many challenges in 2017.
The Deputy Chairman of VNREA also said that in 2017, the mid-end housing segment will be a hot spot of the market. Affordable social housing and commercial housing will have opportunities to thrive. Hi-end housing segment which dominated the market in 2016 will continue to grow in 2017. There will be a strong differentiation between hi-end projects of prestigious developers and projects labeled “hi-end” despite not really good financial resources and management capabilities.
Advantages of the housing market in 2017 also came from infrastructure push. Specifically, planning for a new urban infrastructure in Hanoi becomes increasingly synchronous. Highways, inter-regional routes, metro lines will create huge opportunities for real estate investment, both in the medium and long term.
However, according to Mr. Ha, Hanoi real estate market in 2017 is expected to face many challenges. Since Jan 01, 2017, real estate credit has been strictly controlled in accordance with the roadmap of Circular 06/2016 / TT-NHNN (replacing Circular 36/2014 / TT-NHNN of the State Bank). This Circular will raise the risk factor in the real estate business from 150% to 200% and gradually limit the use of short-term capital for medium term and long term. This will be a major challenge for the residential market in particular and the property market in general because this source of capital plays a decisive role in the development of the market, accounting for 70-80% of capital structure.
Mr Ha also pointed out, one of the other challenges that the real estate market in 2017 has to face is taxation for the second home. Although it is just a direction now, this taxation is inevitable in the future. Along with that, many experts recommend tax increase for urban areas and big cities because people there benefit more modern, synchronous infrastructure than people in countryside. However, tax policies are considered barriers to the development of the residential real estate market.
The supply-demand imbalance and domination of high-end properties in 2016 also threatens the balance of the market in 2017. In addition, the uncertainty of the Agreement on the Trans-Pacific Partnership (TPP) will also affect the housing market in 2017, said Mr Ha. It will certainly impact the shift of production and investment flows into Vietnam property market in the medium and long term. TPP can also change the demand in these segments: luxury housing real estate, industrial parks and offices in big cities.
(Source: Nhip song thoi dai)