The Vietnam luxury property market gets talked about quite a lot most these days. With a mix of sexy developments and international investment, it is easy to see why. And while luxury real estate does have its role, the Vietnam mid-market property segment could be the country’s most important.
This is due in large part to the country’s rapidly growing middle class. Research from Boston Consulting Group found that Vietnam’s middle and affluent class will surpass 33 million people by 2020. If this trend holds up, nearly one third of the country would have achieved middle-class status.
Of course, with increased spending power comes increased demand for housing, especially in Ho Chi Minh City and Hanoi. The Vietnam mid-market property segment in these two cities will need to keep up with demand.
In addition to the growing urban populations, an estimated three million people from rural areas will be moving to Hanoi alone with foreign workers and engineers also creating new demand in the Vietnam mid-market property segment.
“This year (2019), mid-end products are expected to keep dominating the Hanoi market with the launch of township developments,” Nguyen Hoai An, CBRE Director at the Hanoi office, told VietNamNet.
Meanwhile, Le Vu Thanh Tam, expert from the Economic and Finance Academy, believes supply in the Vietnam mid-market property segment will drop even as launches dominate the landscape. That’s because older residential projects in Ho Chi Minh City and Hanoi have a limited number of units for sale while some developers have opted to build high-end developments instead of mid-market ones.
There are a few developers active in the Vietnam mid-market property segment. EZ Land is among the most notable homebuilders with mid-market projects such as HausNeo and HausBelo creating significant interest among buyers. These projects feature a unique blend of European design, colourful Asian culture and modern touches.
The end result is homes that offer buyers quality while maintaining affordability. Firms such as EZ Land will continue to play an important role in the real estate market, ensuring the Vietnam mid-market property segment isn’t forgotten about. While the luxury property market is attractive, demand may not be sustainable here long term.
But with a growing middle class and an influx of population moving from rural areas to the city, the Vietnam mid-market property segment is definitely one to watch.