| Abstract | Vietnam has officially jointed World Trade Organization (WTO) in 2006 and right immediately received a recorded Foreign Direct Investment (FDI) amount from several countries and regions. The proportion of FDI in real estate (property) took account of approximate 20% to 30% of total registered FDI amount per annual. The top FDI record was in 2008, when Vietnam attracted USD71.7 Billion, in which property section received USD23.6 Billion (equivalent to 33% of total FDI).
With the population of 90 million, GDP kept growing from 5.3%-8.5%/annual and stable politic country, Vietnam and particularly Ho Chi Minh City were expected and foresaw as great potential market for property investment by foreign developers. From 2006 to 2010, foreign developers entered Vietnam real estate market ambitiously with mega scale and luxury projects at premium locations. They brought in well reputable international consultants, experienced experts, experienced contractors, suppliers and etc. to dominate the market. The above factors plus with strong financial support from oversea fund, they became the key players, controlled the entire real estate market and concentrated mainly on above average and luxury segment. In other side, local developers had not much choice; they sold their land to foreign developers or jointed venture as minority partner in the JV or developed medium and affordable property segment.
The World economic crisis sprouted since early 2009; started its adverse effect to the macroeconomic of Vietnam from beginning of 2010. The first impact was the reduction of FDI, GDP growth rate (5% to 5.9%), average income, credit market and etc. All these led to the gloomy (frozen) period of Vietnam property market. This period witnessed the rearrangement and screening of property market. Thousand investors bankrupted, consultants, contractors had no job, suppliers had no clients and etc. Consequently, the market was almost frozen. Only developers who have better financial support and experience to overcome crisis were able to survive.
Vietnam macroeconomic has gradually improved in early 2014 and HCMC property market has shown recovery signal as well. Market reports shown completed projects with satisfaction quality, reasonable price and developed by good reputation developers recorded good sale result. The numbers of unsold units at residential segment were tremendously reduced. The occupancy rate of office building, hotels, retail and etc. have been ameliorated. Together with the recovery of property market, local developers have remarkable recovered; they emerge as “novator”, dethrone foreign developers and dominate the market. However, the above domination and recovery of local developers are evaluated as temporary natures only. Where are foreign developers? What’s happening? This research will find out what was happening to the market, market forecasting in coming years and lesion learned from the study. |