In its first few months, 2017 is shaping up to be an active year for the local real estate market – albeit one which could face some challenges. Dau Tu Bat Dong San talked about the year’s prospects with CBRE Vietnam’s newly-assigned Managing Director Dang Phuong Hang.
What is your assessment of the real estate market this year?
2017 is more active but there still remain challenges for the real estate sector. As far as residential properties for sale, thousands of products which started construction in 2014 will be handed over this year.
As I see it, belief from buyers is very important. Buyers are paying special attention to the product quality developers committed to. The product must be as good as promised or these buyers will refuse to complete the purchase.
The market during the last 12 months has shifted towards midlevel and more affordable residential properties.
Apartments in the leasing segment, meanwhile, are increasingly subject to competition between buy-to-let and professional leasers. The supply of buytolet residential properties has increased sharply, which has had a negative effect on rent.
For buytolet investors, I suggest that they focus on projects which have very good locations and are managed by professional management companies; otherwise their investments may not generate the anticipated returns.
In centrally located commercial properties like offices, retail, and hotel businesses, I still see high interest from both domestic and foreign investors, especially those from Singapore, South Korea, and Japan.
As the first-ever Vietnamese Managing Director of CBRE Vietnam, responsible for all of CBRE’s business activities in this country, what will your opportunities and challenges be like?
I see both opportunities and challenges ahead. CBRE, as you know, is one of the brand names which foreign investors have trusted and cooperated with during the last 14 years.
We have a young and talented team and a very good database of the Vietnam property market. The market however is more competitive now, so we must also be motivated and creative to be well-positioned in the market.
With your 20plus years of experience in the local real estate market, what perspective could you give on the market cycle? Where is Vietnam1's real estate market now?
Vietnam's real estate market has been in a recovery period since 2014. The market this year will continue to be active and develop, but with a slower pace than in 2015 and 2016. I have also noted that the market has moved away from speculators toward end-users, with a greater supply of affordable and mid-range properties which can meet the demand of a wider group of customers.
How about the market from now to the year's end?
To the year’s end, the market will have a large supply of affordable housing projects. Developers therefore must focus on creating differences in order to compete with others. Foreign developers continue to focus on traditional segments such as offices and residences, followed by hotels and resorts.