“Vietnam’s real estate market in 2022 will likely see positive changes, however, the Covid-19 pandemic is still a risk that must be taken into account as an uncertain variable and it can have a strong impact on the real estate market,” Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management has forecast.

Vinhomes-invested TechnoPark Tower green project in Hanoi. Photo: Vinhomes

Given that the Covid-19 pandemic cast a shadow over the real estate market, Chung gave three scenarios in 2022. In the most optimistic one, the real estate market in 2022 and the 2022-2025 period will enter a new development cycle, assuming that the economy recovers as some mechanisms and policies favoring the market will be adopted.

In a worst-case scenario,  the Covid-19 pandemic is still evolving in a complicated manner and the economy could not regain the expected growth, nor improve the legal framework on land.

“The neutral scenario depends on the extent of the impacts,” Chung said.

From an economist’s view, Can Van Luc, Chief Economists of BIDV, said that investments were still poured into real estate in 2021, in which, housing loans in the third quarter of 2021 increased by about 6% compared to late 2020. The total real estate credit balance was about VND2 quadrillion (US$85.2 billion).

In the first 11 months of 2021, the total newly-registered foreign direct investment capital in real estate reached nearly $2 billion (accounting for about 11% of total FDI inflows into Vietnam). In the context that Vietnam is promoting public investment, the implementation of a series of infrastructure projects will create a driving force for the real estate market to grow strongly in 2022.

Neil MacGregor, Managing Director of Savills Vietnam, said that housing development, especially in urban areas, will thrive thanks to the huge demand. Besides, the fact that Vietnam is participating in many free trade agreements will help industrial and logistics real estate grow strongly next year.

Chairman of the Vietnam Association of Realtors (VARS) Nguyen Van Dinh said that people still prefer to buy land to protect asset values and land would continue to be the first choice of investors.

Local insiders commented while demand for housing remains huge, the market in 2022 will still face supply difficulties as "bottlenecks" in investment, housing, and real estate laws have not been removed.

From a regulator perspective, Minister of Construction Nguyen Thanh Nghi said his ministry will continue to promote housing development, especially social housing while strengthening management and ensuring that the market will remain stable in 2022.

The ministry will also focus on amending the Law on Housing and the Law on Real Estate Business, urging ministries, branches, and localities to implement the National Housing Development Strategy for the 2021-2030 period and to remove difficulties for the development of social housing, low- and middle-income housing, and address the imbalance in the housing product structure.

Looking back at the real estate market in 2021, Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn affirmed that the market experienced a volatile year.

In the first quarter of 2021, the market heated up with a large-scale land fever, in which hot spots were provinces such as Thai Nguyen where housing prices went up 50%, and Bac Giang (up 37%). In Hanoi, land prices also soared in Dong Anh District by 36%, Ba Vi (by 33%), Quoc Oai (by 32%).

In April 2021, the Covid-19 pandemic re-emerged and subsequent restrictions froze the market for several months. When the restrictions were lifted, the demand for real estate bounced back.

Despite two years of the complicated pandemic, Vietnam’s real estate market still recorded positive signs. According to the senior director of CBRE Vietnam, Duong Thuy Dung, there were only 41% and 42% of newly-launched projects were sold in Hanoi in 2019 and 2020, respectively. The rate reached 52% by the third quarter of 2021.