Investment climbs in property sector
Investment inflows into the property sector has surged, especially credit from banks, said Nguyen Tran Nam, former deputy minister of Construction and chairman of the Vietnam Real Estate Association (VREA).
Nam made his statement at the debut of the Vietnam Association of Property Brokers in the southern region on August 18 in HCM City. The association represents individual brokers, real estate trading floors and brokerage companies.
"The market would find it hard to have a bubble situation, as it has seen sustainable development. Estate brokers have been especially more cautious, resulting in property prices becoming more stable," he added.
However, he said Vietnam should remain cautious about the situation.
Statistics from VNREA showed that property transactions had sharply increased in the second quarter of 2015. In the first half of the year, Hanoi had more than 9,200 successful transactions, and those in HCM City reached over 8,700, which was double those during the same period last year.
The association further said this increase was because other investment channels, such as gold, securities and savings have become less attractive, while the property market has surged.
Additionally, the chairman said estate prices have been relatively stable or increased by 1 to 2 per cent at some projects, despite a surge of successful transactions.
"It means that banks, people, foreign companies and investment funds have seen property as a good investment channel, which could bring high profits," he said.
In the banking sector, outstanding loans for the estate industry reached VND360 trillion (US$16.07 billion), double the figure in 2009 when the market came witnessed a crisis.
The average overseas remittances into the country were US$11 to 12 billion a year, while just in the property sector, overseas remittances accounted for 25 per cent of the total.