MACRO OVERVIEW
US$ 37 bn
Total registered FDI 2023
5.1%
GDP growth 2023
3.3%
YoY CPI increase 2023
According to the General Statistics Office of Viet Nam (GSO), GDP growth in 2023 was 5.1%, slower than 2022 growth of 8%. While notably slower than last year, 2022 growth of 8% came off the back of growth of only 2.9% in 2020 and 2.6% in 2021. However, there were improvements in the second half of 2023, given that growth of 3.3% in Q1/2023 was the second lowest rate in 13 years.
Total registered FDI of US$37 billion increased by 32% YoY, and disbursed FDI increased by 4% YoY to US$23 billion, the highest in five years.
EuroCham’s Business Confidence Index (BCI) for Viet Nam increased to 46.3 in Q4/2023. Looking to Q1/2024, 29% of businesses perceive their prospects as "excellent" or "good" with extreme worries dropping from 9% to 5%.
Residential Real Estate Overview
Apartment
In Ha Noi, primary apartment stock of 11,911 units dropped by 40% quarter-on-quarter (QoQ) and 41% year-on-year (YoY). Primary asking prices of VND 58 million/m2 net sellable area (NSA) increased by 7% QoQ and 12% YoY. Average primary prices have increased for 20 consecutive quarters.
There is a disconnect between demand and supply in Ha Noi, especially for affordable properties. The Metro and ring roads will accelerate decentralisation when complete.
Do Thu Hang, Senior Director, Advisory Services, Savills Ha Noi
Ha Noi Apartment Performance
In Ho Chi Minh City, primary stock has trended downward since 2017. In Q4/2023, primary stock of 7,600 units was stable QoQ but dropped by 5% YoY. Primary apartment prices in Ho Chi Minh City in Q4/2023 returned to the 2020 level at VND 69 million/m2 NSA, decreasing by 36% QoQ and 45% YoY.
Ho Chi Minh City Apartment Performance
Residential stock in Ho Chi Minh City is in incredibly short supply, especially considering that the city’s population exceeds 10 million. In Ho Chi Minh City, apartment returns have softened for five years, however, they remain above deposit interest rates. As such, apartments continue to be a profitable investment channel.
Giang Huynh, Head of Research and S22M
Villa/Townhouse
Stock in the villa/townhouse (VLTH) segment across Viet Nam remained chronically low.
In Ha Noi, primary villa/townhouse stock of 710 dwellings came from 16 projects, decreasing by 2% QoQ and 23% YoY. Limited stock and expensive inventory limited absorption significantly. In Ha Noi, in Q4/2023, sales decreased by 37% QoQ and 67% YoY to 64 dwellings. Quarterly absorption of 9% decreased by 5 ppts QoQ and softened by 12 ppts YoY.
Despite increasing by 1% QoQ and 10% YoY, in Q4/2023, primary villa/townhouse stock in Ho Chi Minh City remained low at 771 dwellings. Performance was also underwhelming; in Q4/2023 sales were equal to Q3/2023 at 64 but decreased by 24% YoY. Quarterly absorption of 8% was stable QoQ and dropped by 4 ppts YoY.
Lack of new supply, high-priced inventory and low buyer confidence constrained landed property performance. Infrastructure development will continue to push residential demand to surrounding provinces and areas with more affordable prices and large land banks.
Matthew Powell Director, Savills Ha Noi
Commercial Real Estate Overview
Office
Office stock in Ha Noi reached 2.13 million m2 NLA in Q4/2023 and decreased by 1% QoQ and 1% YoY, and gross office rent in Ha Noi reached VND 513,000/m2/month with occupancy of 87%.
Ha Noi Office Performance
In Ho Chi Minh City, office stock rose by 3% QoQ and 6% YoY to 2.7 million m2 NLA. Office rent reached VND 779,000/m2/month with high occupancy of 89%.
Ho Chi Minh City Office Performance
Despite notable pipelines, office stock in Viet Nam’s leading cities remains well below regional peers like Singapore, Jakarta, and Bangkok.
ICT, FIRE, and manufacturing tenants are significant in both cities. Forecast employment requirements for 2024 highlight that these sectors will remain key players in the Ha Noi and Ho Chi Minh City office markets.
VND 3.8 trillion
Profits for Viet Nam's luxury distributors in 2022
In Ha Noi and Ho Chi Minh City, retail performance improved in Q4/2023.
In Ha Noi, retail rent of VND 1,169,000/m2/month rose by 3% QoQ and 15% YoY, and retail occupancy in Ha Noi was 88%.
Ha Noi Retail Performance
Ho Chi Minh City rent of VND 1,300,000/m2/month improved by 3% QoQ and 5% YoY with occupancy of 92%.
Ho Chi Minh City Retail Performance
Hospitality Real Estate Overview
120.6 mil
Visitors in VN 2023
US$2.9 bn
Registered FDI Ha Noi 2023
16,215
Foreign workers in HCMC in 2023
Hotel
In 2023, Viet Nam had 120.6 million visitors, increasing by 19% YoY. International visitors reached 12.6 million visitors, improving threefold compared to 2022 and exceeding the 2023 target of 8 million visitors. However, there is room for improvement as this performance was equal to 70% of the 2019 level.
Although there is room for improvement, city markets like Ha Noi and Ho Chi Minh City are performing better than coastal cities like Nha Trang and Phu Quoc. In Ha Noi, hotel occupancy in 2023 averaged 60% with an ARR of VND 2.7 million/room/night. In Ho Chi Minh City, in 2023, performance improved; occupancy reached 63%, and ARR grew by 19% YoY and reached the 2019 level at VND 2.0 million/room/night.
Serviced Apartment
FDI inflows and expats drive serviced apartment performance in Ha Noi and Ho Chi Minh City. Expats returning and positive FDI inflows from major projects and improving infrastructure will auger well for future demand.