HA NOI — Property services firm CB Richard Ellis Viet Nam predicts that more investors will be able to capitalise on opportunities in Ha Noi's real estate market this year, as last year's tough market conditions ease.
|A villa at Ciputra in Ha Noi. Property services firm CB Richard Ellis Viet Nam predicts that more investors will be able to capitalise on opportunities in Ha Noi's real estate market this year. — VNA/VNS Photo Kim Phuong
"For some people, companies and individuals, 2012 will be a year when Viet Nam finally becomes a reality," said CBRE Viet Nam managing director Marc Townsend at the firm's fifth annual "Fearless Forecast" presentation in Ha Noi on Thursday.
"If you've been listening to me and CBRE's research, you know that certain sectors have seen prices declining," Townsend said. "Some sectors have seen prices declining for over three years. There has been pain in the market, with cash flows being challenged as restrictions on capital flows came into place and buyer appetite faded."
But he noted that rising auto sales suggested that Vietnamese consumers had money to spend.
"Mirroring the growth in sales of entry-level cars, we expect more affordably-priced residential sectors, targeted at the growing middle class, to perform strongest," he said. "While the rate of home sales in Ha Noi has been significantly lower than in previous years due to large new supply, the actual number of units sold was not below the historical average, suggesting demand potential."
Meanwhile, Townsend said, Ha Noi's infrastructure was on its way to the next level. In the next four years, different areas of the city would be conveniently connected by new elevated highways, metro lines, and additional bridges. By then, the psychological barrier of traveling to the other bank of the river, or to certain suburban districts, would be lifted, bringing people and buildings closer.
He predicted that price levels in the Ha Noi residential sector would start leveling off, following the trend in HCM City over the last few years.
"In regards to the property market, people are simply sitting on the sidelines. The price of gold is at an all-time high, and when that starts to fall, people will move out of gold and capitalise on their profit by going into real estate," he said.
As for the commercial property sector, Townsend noted that shopping centres outside of the central business district faced fierce competition. Further new supply in 2012 would mean more competition and more vacant retail space.
He also predicted that local hoteliers would continue to be active in the mergers and aquisations market, while international hoteliers maintained a long-term interest in the Ha Noi market.
"The past 12 months have seen the growth of the institutional investment deal in Viet Nam, with notable transactions occurring for foreign investors. We believe that these deals will pave the way for further activity in the years ahead, with 2012 being no exception."
With developers facing cash flow problems and many properties already viewed as distressed, he said the current market offered an opportunity for foreign investors. — VNS