A villa at the Phu My Hung new urban area in HCM City. (Source: VNA)The Trans-Pacific Partnership (TPP) deal will have a positive impact on the domestic real estate market, while the property market has recovered in the third quarter, experts said.
The TPP deal has been stricken after five years of negotiations. It is expected that the deal will promote growth of the domestic economy and the property market, Do Thu Hang, head of research and consultancy at Savills Vietnam's Hanoi branch, said at its recent press conference on Hanoi's property market in the third quarter in Hanoi.
"However, the TPP deal cannot affect the local property market in the short term because the deal needs to be ratified by member countries, and Vietnam needs time to have specific policies that are adjusted following the TPP commitments.
"The deal will have positive impacts on the economy in general and the property market in particular in the medium and long-term periods."
Property in industrial zones will directly benefit from the TPP. The foreign companies of TPP countries will increase investment in Vietnam and move their production work here to get advantages in production and business from the TPP commitments, Hang said.
The serviced apartment segment will also benefit because after moving their business to Vietnam, the foreign investors and workers will need rented apartments to work and live here in the long-term period.
The market for offices for lease will be also affected by the high demand for operational offices when foreign investors increase investment in Vietnam, she said.
The retail market will attract more investors because the TPP deal will promote export activities among member countries, including Vietnam.
That means the other TPP countries will increase exports of consumer goods to Vietnam and will need to open a retail system here, leading to growth of the local retail property market, she said.
The apartments-for-sale segment will see positive developments after the TPP comes into effect, Hang said. Foreign investors and workers will consider buying property when they plan to work for a long period in Vietnam.
The country had amended existing laws to encourage foreigners to buy property here since July 2015, she said.
But as of now and for a short – term period, foreigners wanting to buy property in Vietnam are just studying the market without purchasing any because the state is yet to finalise the regulations guiding the implementation of the amended laws, according to Hang.
Chairman of Keller Williams Commercial Northern Vietnam Pham Hai Dang said he agreed with expectations about a positive development of the local property market after the TPP comes into effect, bizlive.vn reported.
Foreign enterprises will come to Vietnam to develop their production and business activities, including building of factories and warehouses, creation of jobs, along with increase in demand for support industries and services. The services comprise hotels, trading centres, offices and serviced apartments, he said.
M&A deals in property segments such as hotels, offices, retail units and resorts are expected to develop strongly in the future, he said. The TPP, especially, will promote development of property in industrial zones.
Some 30,000 real estate transactions were recorded in the first nine months of 2015, similar to the figure for the whole of 2014, according to Chairman of the Vietnam Real Estate Association Nguyen Tran Nam.
He said the real estate market had skyrocketed and the number of real estate transactions this year is expected to be double that of 2014.
Several new government policies and regulations, coupled with high confidence in the sector's outlook, have convinced investors and customers to return to the market.
Industry experts are confident that Vietnam's property market is not experiencing a bubble, although the increase in liquidity in the first nine months of this year has triggered concern.
Deputy Director of the Department of Housing and Real Estate Management under the Ministry of Construction Vu Van Phan said there are no signs of a bubble in the country's real estate market.
Phan said at a discussion at the Global Investment Forum jointly held by the Ministry of Planning and Investment and Euromoney that a property bubble occurs when prices continually soar.
However, real estate prices are seeing a stable trend, Phan said, adding that only high-quality projects are attracting price increases.
Cheong Ho Kuan, executive director of Gamuda Land Vietnam, was quoted by Dau Tu Bat Dong San (Property Investment) newspaper as saying that there is no need to worry about a property bubble in Vietnam at the moment, given the country's macroeconomic stability and the huge housing demand from the country's young population.
Many experts have said they see opportunities to pour investment into the property market, from the high-end to the popular segments.
Minister of Construction Trinh Dinh Dung in July said the ministry will closely watch market developments to prevent the occurrence of a bubble.-VNA
