Market Trends of Vietnam Real Estate & Mortgage Industry
Increased Population and Urbanization
Vietnam is currently experiencing one of the most intensive urban transitions in the world. Its urban population doubled over the last thirty years. Vietnam’s urbanization rate will be at least 45% by 2025 and over 50% by 2030 under an action program adopted by the Government. The Government recently issued Resolution No. 148/NQ-CP on the action program to realize Politburo’s Resolution No. 06-NQ/TW dated January 24, 2022, on urban planning, construction, management, and development by 2030 with a vision towards 2045.
The extensive development of cities, attracting more population movement from small towns to large cities, has boosted the demand for residential products. Vietnam's 2023 population is estimated at 98,8 million people at mid-year and is expected to reach 120 million by 2050.
According to the latest UN projections, half of Vietnam’s population will be urban by 2039, and that figure will reach 60% by 2050. The average floor area per capita in urban areas will reach at least 28 square meters by 2025 and 32 square meters by 2030.
According to the IMF’s October 2021 forecast, Vietnam’s gross domestic product (GDP) growth is projected to grow significantly from USD 343.1 billion in 2020 to USD 630.5 billion by 2026.
The country is experiencing rapid demographic and social changes, which are anticipated to support the effective demand for the residential real estate industry over the coming years.
Increase in commercial development
Vietnam's commercial real estate market is expected to record a CAGR of 14.89% over the forecast period. Vietnam is now one of the fastest-growing e-commerce markets in Southeast Asia. Amid the COVID pandemic, more and more consumers opted to shop online, boosting demand for cold storage warehousing for food and other essential goods.
E-commerce needs storage space three times larger than traditional logistics activities. As per industry sources, both domestic and foreign investors have targeted healthcare logistics, as they will need more refrigerated warehouses to meet the rising demand for temperature-sensitive products like food, medicine, and COVID-19 vaccines. In the retail sector, Ho Chi Minh City is expected to have over 200,000 sq. m. of new retail spaces by 2023, both in CBD and non-CBD areas. Categories such as F&B and health & beauty will continue to expand on retail podiums.
Vietnam's industrial property market has performed well and is expected to grow. While Samsung Electronics has a massive factory covering 67,088 sq. m. in Ho Chi Minh City, Apple Inc. has plans for further expansion in the country. As Vietnam is set to become the new manufacturing hub in Asia, the industrial property market has outperformed other commercial property sectors.
