VIETNAM TO SURGE AHEAD DESPITE TPP’S DEATH

Despite the withdrawal of America from the TPP deal, Vietnam will continue to see more FDIs in 2017, flowing into the manufacturing and real estate sectors.

Photography by Jan Yong

Market sentiments for Vietnam in 2017 continues to be rosy. A recently released survey conducted by the Urban Land Institute and supported by PwC (PricewaterhouseCoopers) on the Emerging Trends in Real Estate Asia Pacific 2017 has seen the main economic engine in Vietnam (especially Ho Chi Minh City) chart a steady course by maintaining its real estate investment prospect standing within the top tier of the Asia-Pacific region, and even improving by climbing up one position to fourth on the table.

The relative stability of the market void of extreme fluctuations in prospects has provided much needed credibility to Vietnam’s real estate market. In comparison, Ho Chi Minh City’s more illustrious neighbours occupying the top four spots above it in 2016’s survey results had all fallen from grace well below HCMC in 2017’s prospects.

[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3,4,5,6,7,8″ ihc_mb_template=”1″ ]

On the broader scheme of things, 2017 will yet be another good year for progress in Vietnam’s continued push for growth with GDP forecasted by the Asian Development Bank to be 6.3% in 2017 up from 6.0% year-on-year. Overall macroeconomic predictions indicate improvement for the coming year. Inflation is expected to remain stable due to low commodity prices; the Vietnam Dong is continuously the most stable currency against the USD when compared regionally, foreign exchange reserves are strengthening, and non-performing loans are declining.

2017 will reveal the impacts of previously concluded free trade agreements (FTAs). Vietnam is the only country to benefit from several FTAs concurrently, combining to cover 79.6% of the world’s GDP as indicated by McKinsey & Company, NCDT, World Bank, BSC, and the General Statistics Office of Vietnam. This should boost the economic engine of Vietnam, fuelling the continued upwards growth of the residential property market here as it expands to catch up with Vietnam’s regional peers.

EXTERNAL INFLUENCES

The impact of Trump ascending as president of America has raised global economic concerns, as spotlight is put on the Trans-Pacific Partnership FTA and how Trump’s campaign position of concentrating on domestic industries and limiting FTAs will hamper economic progress in Vietnam as America is a key trading partner and valued at 21% of Vietnam’s export market.

In contrast, if Trump’s policies resulted in a loss of confidence by investors in the American market, foreign real estate investment money will flow outwards into more secure destinations and Asia will be high on the radar of most investors (as was similarly expected of Brexit but eventually failed to materialise). As Vietnam is predicted to be one of the outstanding Asia-Pacific’s real estate markets in 2017, it is reasonable to expect that significant money flow will eventually find its way here in 2017 and beyond.

AIDAN WEE is Director of Huttons Vietnam Company Limited.

[/ihc-hide-content]

0
    0
    Your Cart
    Your cart is emptyReturn to Shop