Remittance plays important role in enhancing real estate sector’s liquidity: experts

In 2016, due to the influence of the presidential election in the US, the amount of remittance to Vietnam was only US$9 billion, a level less than expected. But in 2017, the figured recovered to US$13.8 billion, up 16.8% over the previous year, making a new record height. In Ho Chi Minh City alone, remittance the same year hit US$5.2 billion, a rise of 4.5% year on year.

Statistics from the State Bank of Vietnam, Ho Chi Minh City branch, showed that in the first half of this year, the amount of remittance was estimated at US$2.45 billion, up nearly 20% over the same period in 2017. Of the total, the majority came from the US with over 60%, and Europe with more than 19%.

As many as 72% of the remittance was poured into production and business, 22% into real estate, and 6% for personal spending. As a result, each year, the real estate sector receives about US$2.5 billion, helping improve the market’s liquidity.

Real estate firms held that the millions-strong Vietnamese community in the US and Europe and Asian countries with high demand for housing when they retire or returning the homeland for working and investing makes the market section targeting overseas Vietnamese (OV) attractive.

The branch predicted that the remittance to Vietnam in 2018 will increase about 20 percent over 2017.

Real estate firm Savills commented that the broadened legal framework also makes OV customers a more promising group.

However, many experts asserted that although real estate for OVs is attractive, products for the group remain few.

A survey by Savills Vietnam suggested that along with basic aspects such as location and prices, major factors of foreign customers and OVs’ interest while investing in Vietnam’s real estate include safety, security as well as added services following transactions.

Considered as a newly-emerging and promising market, Vietnam is a favourite destination for OV investors. In order to optimise the capital and remittance, in particular in real estate, experts held that it is necessary to ensure the transparent and safe development of the sector.