The reduction in the interest rate, the opportunities from the EU-Vietnam Free Trade Agreement ratified in Feb 2020 and expected to entry into force by July 2020 and overseas Vietnamese flocking home to avoid coronavirus outbreak are encouraging signs for the Vietnam real estate market from the second half of this year.
Reduction in bank interest rate
On 17 March 2020, banks all cut deposit rate, loans interest rate in order to support the business owners and the economy during The Coronavirus outbreak. The massive reduction of savings interest rates by banks has affected the psychology of many investors. In the context of lower savings interest rate, uncertain fluctuations of gold prices and an unstoppable plunge in stock market by Covid-19, the property market – “stability investment symbol” as housing segment seems to be extremely appealing to home buyers and investors, especially after CoronaVirus is completely controlled.
The EU – Vietnam Free Trade Agreement (EVFTA)
The EU – Vietnam Free Trade (EVFTA), ratified on 12 February 2020 and expected to entry into force in July 2020, will strongly promote industrial and export sectors in Vietnam through the removal of 99% of tariffs on goods. For investors, the removal of tariff barriers has opened up a vast market for goods and trade exchanges and investment expansion. Also, it helps foreign businesses to participate more deeply in the supply chain and manufacture in Vietnam. In particular, in the context of the rapidly and complicatedly changing world-regional political and security situation and the widely spreading Coronavirus, the EVFTA helps Vietnam improve internal resources, support growth and compensate for the shortage caused by this disease.
In the real estate sector, Vietnam’s industrial real estate will benefit greatly from relocating the production areas of international corporations, followed by investment in infrastructure and development of satellite townships. In addition, housing demand for professionals is also a positive sign in Vietnam’s real estate market in general.
Remittances and trend of flocking home by overseas Vietnamese to avoid Coronavirus outbreak
While other countries, including developed ones, become “powerless” against Covid-19; in recent days, tens of thousands of overseas Vietnamese have returned to Vietnam, seeking for the peaceful and safe place. This shows the absolute belief of such overseas Vietnamese towards their homeland. Moreover, the World Health Organization’s call for countries to refer to how Vietnam has prevented the epidemic also shows that the efforts and determination of our Party and State in such ”The fight against Coronavirus” have been recognized by Vietnamese and the international community.
Thousands of people coming to Vietnam during the Covid-19. Photo: Hoang Ha
The amount of remittances by overseas Vietnamese for three consecutive years were in the top 10 largest remittance-receiving countries in the world with USD 16.7 billion in 2019, USD 15.9 billion in 2018 and USD 13.8 billion in 2017 by legal line. For those, the Covid-19 epidemic can be considered as a test of the economy and living environment in Vietnam, which has significant impacts on their investment decisions. Five million overseas Vietnamese around the world are a huge opportunity for Vietnamese real estate market by the time the pandepic ends.
“In the most difficult times of life, returning to Vietnam is as being back with family. I feel very happy and secured. My family and I are considering to invest in properties in some outstanding projects in Hanoi. The Coronavirus pandemic has admonished me that a house with full of light and overlooking greenery is especially important because according to health experts, fresh and cool air is a natural disinfectant, which helps to kill bacteria and prevent viruses. In addition, the apartment must also meet our requirements of good location (inner-city of Hanoi), excellent services and facilities as well as prestigious developer. My friend introduced me to Ciputra Hanoi International City, which fully meets our criterias. In the coming time, when the quarantine period is over and the epidemic is under control, I will come to see TheLink345 apartment of Ciputra Hanoi for learning more ”- said Mr. Pham Van Ha who has just returned from France.
Living space with full of light and trees at TheLINK345 Ciputra Hanoi Apartment Complex
TheLINK345 has been handed over in 2019. Currently, only a few units are offering for sale at an attractive price
According to analysts, if Vietnam continues to well control the current Covid-19 outbreak and overcome this pandemic, it will be a safe bright spot for epidemiology, economy and politics, which will more and more attract overseas Vietnamese’ investment as well as foreigners’ to come for living and working.