Despite a gloomy year for the market in 2023, the industrial property segment stood out as a bright spot with increased demand and rentals.
Thai Binh, Nghe An and Ba Ria-Vung Tau provinces emerged as promising locations for industrial properties.
The occupancy rates at industrial zones were 83% in the north and 91% in the south, while the national average was 80%, according to data from property consultancy Savills.
It said there has been an increase in surveys of industrial properties by multinational manufacturing, logistics and e-commerce businesses, signaling a rise in demand in the segment.
Pham Ngoc Thien Thanh, head of research and development at property consultancy CBRE Vietnam, expects industrial land rentals to rise by 6-10% a year in both the northern and southern regions in 2024-25, and warehouse rentals by 2-4%.
Industrial land and warehouses are selling thanks to strong demand from several industries like apparel, pharmaceuticals and electronics, she says.
Experts also expect mergers and acquisitions (M&A) to remain strong in the property market.
In the first 10 months of 2023 they were worth $4.4 billion, or nearly a quarter of all M&A transactions in the country, according to audit firm KPMG.
The average transaction value more than tripled from the previous year and reached a five-year high of $54.5 million.
Property consultancy Cushman & Wakefield forecasts large amounts of foreign money to flow into the real estate market in 2024-26.
Many deals involving foreign investors have been completed recently or are currently under negotiations.
Foreign investors mostly eye lands free from legal entanglements, allowing for hassle-free development, according to Cushman & Wakefield.
The housing market is garnering interest from both domestic and foreign developers and is expected to see an increase in new supply while demand remains high.
The number of transactions involving apartments and low-rise building in 2023 was on par with 2022, when the housing market was generally strong until the downturn began toward year-end.
An increase in supply toward the end of 2023 and so developers offering lucrative promotions to sell them sustained the segment, according to the Vietnam Association of Realtors (VARS).
VARS analysts believe more housing projects will enter the market this year, especially in the first and second quarters.
By the start of Q2 Hanoi is expected to add 15,000 new apartments and low-rise houses.
In the south, Binh Duong Province will be a bright spot with 10,000 new housing units while HCMC will add 5,000.
VARS expects 25,000 apartment transactions this year, most of them bought for self-occupation.
Duong Thuy Dung, executive director of CBRE Vietnam, says property developers are hesitant to hike prices now, meaning people have a great chance to buy housing.
Though prices are unlikely to be reduced, buyers can benefit from more promotions, discounts and flexible payment options, she says.
Besides, the secondary market will see increased activity in some places since some investors, who are in a rush to liquidate their assets, will cut their prices, she adds.