HCMC real estate revenue up 6% in H1

By VNA   July 7, 2024 | 12:00 am PT
HCMC real estate revenue up 6% in H1
Property buildings in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Real estate revenue in Ho Chi Minh City reached VND124 trillion ($4.9 billion) in the first half of the year, up 6.1% year-on-year, according to the HCMC Statistics Office.

The real estate market has shown signs of recovery this year, with 3% growth in the second quarter and 2.5% in the first quarter, after a 6.4% decline last year from 2022.

The market hit its lowest point in the first quarter of 2023 with a negative growth rate of 16.2%.

Le Hoang Chau, Chairman of the HCMC Real Estate Association (HoREA), said the market continues to face challenges such as an abundance of high-end housing and a shortage of affordable housing, particularly social housing.

Industry analysts remain optimistic about the market’s outlook, expecting benefits from increased foreign direct investment in the real estate sector and revisions to the Land Law. Foreign direct investment in the property sector was up 70% year-on-year to reach over $1.98 billion as of the end of May.

The influx of foreign capital, accounting for 18% of total FDI, makes the property sector the second most attractive sector after manufacturing. HCMC's strategic location and robust infrastructure make it an attractive investment destination for foreigners, particularly its real estate sector, said industry analysts.

Major investors from Singapore, Hong Kong, mainland China, Japan, and South Korea are increasingly interested in the high-end and luxury segments in Vietnam, with Singapore leading the way with nearly $3.25 billion in investments in the first five months, according to the report.

But the property sector has admittedly been facing challenges such as debt repayment pressures, fraud and other financial scandals.

Numerous bond issuers, mostly real estate developers, have missed interest and principle payment deadlines since the end of 2022 following the arrest of Truong My Lan, chairwoman of Van Thinh Phat, for financial fraud.

This has shaken market confidence. Despite multiple challenges facing the city, its Gross Regional Domestic Product (GRDP) grew by 6.46% in the first half of the year. The country’s largest city aims to achieve a yearly growth rate of 7.5-8%.

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