Following the foundation laid by the Government’s monetary policy of 2013-2014, Vietnam’s macroeconomic conditions have vastly improved. Almost all asset classes have rebounded, most notably the residential sector. Legal reforms, meanwhile, continue to transform industry practices. Vietnam performs counter-cyclically to the region and in 2015, a period of relative stagnation, it outperformed its regional peers. In the recently announced Around the world in dollars and cents report of Savills World Research, analysis shows this trend is set to continue in 2016, although some headwinds persist. Below are some snapshots in each of the main sectors: Residential development – long-term capital growth Rapid urbanisation, a fall in household occupancy and a young population will continue to underwrite residential property demand in Vietnam through 2016. In the short-term, economic fluctuations represent the main risk, but the growing middle-class demand for new homes represents a long-term trend. The Amended Housing Law now allows foreign investment in this sector, supporting future growth previously maintained by domestic demand. The landed residential markets in HCMC and Ha Noi enjoyed strong supply and good absorption in 2015. Products are diversified and oriented towards consumers, with developers vying for market share and producing villas and townhouses with ‘cradle-tograve’ facilities, including healthcare and tertiary services for the aged. This asset class also benefits greatly from improvements in infrastructure and new links, drawing the ‘mortgage belt’ closer to the city.
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