Hanoi (VNS/VNA) - Vietnam's real estate marketcontinues to attract foreign investors because of its growth potential,especially investors from the Republic of Korea, according to real estateconsulting companies.

In a survey by KB Securities, more than half of Korean-wonbillionaires had expressed a desire to invest in real estate in Vietnam, saidNguyen Hoai An, director of CBRE Vietnam, at a recent press conferencereleasing the quarterly report on Hanoi’s real estate market in the thirdquarter (Q3) of this year.

"We have seen a trend of Korean investors buying housesin Vietnam over the past 4-5 years. This trend has been continuing this yearboth in Hanoi and HCM City," An said.

"They have been the most exciting foreign home-buyers inVietnam for many years and the trend shows no sign of stopping."

Customers of CBRE Vietnam said they were interested inVietnam's real estate market because the domestic economy was expected to seerapid growth in the coming years, An said.

Housing prices in Vietnam were attractive compared to theircountry, she said. For example, the average price of high-end housing was about2,000 USD per sq.m in Vietnam while the price of a similar product in the RoKwas about 15,000-20,000 USD per sq.m.

The attractiveness of Vietnam's real estate market isexplained by a number of factors, such as attractive selling prices, highprofit potential and high quality products, according to Nguyen Khanh Duy,Director of HCM City Residential Sales, Savills Vietnam’s branch in HCM City.

Vietnam also amended legal regulations to create favourableconditions for foreigners buying property products in Vietnam, he said.

"Apartment prices in HCM City and Hanoi are generallylower than other cities such as Kuala Lumpur and Bangkok, despite much strongergrowth," Duy said. New home prices in the centre of Ho Chi Minh are nowbetween 5,500 USD and 6,500 USD per sq.m.

Relatively low real estate tax in Vietnam also attractsbuyers both at home and abroad, according to Duy.

Therefore, it is not surprising that the demand for realestate investment in Vietnam has increased significantly since 2015, when theamended housing law opened the local market to foreign investors.

Foreign investors expect those prices to increase in thecoming years, according to An.

"Vietnam's real estate market will continue developing.However, the prices will not be so high in the short term and Vietnam needsmany years to have real estate prices approaching those in developedcountries," she said.

"Growth of real estate prices will depend on economicdevelopment and Vietnamese people’s ability to increase their incomes."

"HCM City has been and will remain an attractiveproperty market for foreign investors," An said.

"In the first nine months, besides Korean investors, wesaw investors from many other countries and territories pay more attention tothe property market in Hanoi, including investors from Hong Kong, Taiwan andSingapore."

In Hanoi, the western region had attracted foreign investorsto buy and rent real estate products, especially from My Dinh to West Lake, shesaid.

There are many advantages in developing property for foreigninvestors when they like the domestic real estate market and consider it anattractive market, according to An.

However, to attract foreign investors, real estate companiesmust pay attention to many factors, especially foreign languages. This meansensuring staff can speak foreign languages and brochures are translated tointroduce products easily to foreign customers.

"This is considered a challenge for domestic propertycompanies because not all of them pay attention to this factor even though theyknow the importance of foreign languages."

Other issues relate to property products, including thedevelopment of property meeting customers’ demands and the representatives offoreign owners managing and trading real estate when they are not in Vietnam.

"If property companies target foreign customers, theyneed to pay attention to these factors," An said.

According to CBRE Vietnam’s quarterly report on the Hanoiproperty market in Q3 released on October 9, there were nearly 6,100 unitslaunched from 18 projects in Hanoi, down by 33 percent quarter on quarter(q-o-q), leading to a total of 26,800 newly launched units during the firstnine months of this year, up by 37 percent year on year (y-o-y).

Launched projects in this quarter were mostly located in thewest of the city, accounting for 77 percent of total newly launched units.

Noticeably, Hanoi’s residential market showed a clear trendof decentralisation given increasing new projects launched in the fartherdistricts such as Thanh Tri and Hoai Duc districts.

In terms of sales performance, more than 4,800 units weresold during Q3, down by 32 percent q-o-q. Although there was a decrease in thenumber of sold units in this quarter, the ratio of sold units to newly launchedwas on par with previous quarters showing stable market conditions.

In terms of pricing, the average primary pricing in Q3 wasstable in comparison with the previous quarter, but recorded an increase of 3percent y-o-y, averaging 1,337 USD per sq.m.

Together with the expansion of the residential market, theaffordable segment is moving farther and farther away. For instance, theprojects’ locations were typically more than 10km from Hanoi’s central businessdistricts (CBD), according to CBRE Vietnam. In comparison, affordable productslaunched in 2019 are typically within a 10-13 km radius from Hanoi’s CBD withrelatively stable pricing.

In the last quarter of 2019, 7,000 units are expected to belaunched, bringing the total new launch in 2019 to around 33,000 units, up by 9percent y-o-y. New supply will mostly come from township developments such asVinhomes Ocean Park, Vinhomes Smart City or Park City.

Primary pricing is expected to experience an upwards trendreaching near 1,360 USD per sq.m on average at year end.

Providing active sales and marketing activities andimprovements in product offerings, sales momentum is forecast to maintain apositive level achieving around 85-90 percent of total new launch during theyear./.