Forbes hails rising office rents, growth in VN housing market

VOV.VN - US business magazine Forbes has recently published an article detailing real estate in Vietnam in which it starts out by stating: “Office rents rising in 2020? Positive GDP growth during a global health crisis? Seems unimaginable, unless you live in Vietnam.”

The piece details numerousse achievements Vietnam has recorded over the past year, given the current health and economic hardships faced by nations across the world.

Forbes stresses that throughout the same period, Vietnam has eclipsed all of its Asian rivals economically by recording positive GDP growth of 2.9%. Indeed, this represents a noteworthy feat considering that last year witnessed the GDPs of neighbouring Thailand and Malaysia suffer declines of 6.1% and 5.6%, respectively.

“Consequently, Vietnam’s real estate market has flourished in recent years, with continued economic growth leading to a surge in property prices. The country’s real estate market proved resilient during the pandemic, with both the industrial and residential sectors leading the pack,” says Forbes.

According to the financial publication, the star of the local real estate market remains the national industrial sector, which has been the beneficiary of a manufacturing boom occurring in recent times. In addition, recent years has seen firms such as Nike, Adidas, and Samsung move their operations out of China and into Vietnam due to increasing production costs in the northern neighbour, coupled with the ongoing trade war with the United States. 

Furthermore, the Vietnamese housing market has also enjoyed an unprecedented period of growth in recent years due to rampant demand for apartments exceeding the supply of units, with many new developments selling out shortly after going on sale to the public.

The website quotes Cushman & Wakefield as saying that the price of apartments in Ho Chi Minh City has risen in response to this added demand and has grown by a staggering 90% between 2017 and 2020, including a rise of 12.8% in 2020 alone.

Despite office markets globally suffering as employees work from home, local economic growth spurred Ho Chi Minh City’s office rents to climb by 1.7% in 2020, while nearby cities such as Bangkok, Singapore, and Hong Kong (China) all saw office rents decline throughout last year.

Similar to the rest of the world, last year wreaked havoc on the Vietnamese hotel sector, with occupancy rates hovering between 20% and 30% for most of the year. While it is expected that the recovery will be gradual, the outlook remains strong given the fact that the country’s travel industry was in the process of taking off before the pandemic.

“With the Government targeting 6.5% GDP growth in 2021, Vietnam’s real estate market is poised to ride the economy’s tailwinds into the future,” Forbes concludes.

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