October 05, 2011 |
Total Page: 76 Pages
Topic: Construction & Materials
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In 2011, Vietnam’s economy size in GDP is estimated at US$120.5 billion. In 2010, Agriculture, industry and service represent 21%, 41% and 38% of GDP, respectively. During the next five years, Vietnam is expected to focus fixing macroeconomic structural problems in order to ensure growth sustainability. Economy is expected to grow at moderate pace, about 5%-6% per year
House ownership in Vietnam is very high. Almost 100% of Vietnamese households live in house that they own. Housing area per person is 16 sqm by 2009 and expected to increase to 21.5 by 2015 as per the Government Housing Action Plan. On average, there are 3.7 persons per household. Nowadays, young Vietnamese are less dependent on their parents and many of them would choose to live on their own if they could afford.
Housing Needs, Preference and Affordability
Vietnamese people prefer landed houses because the Vietnam’s old rice producing culture where one should own and live on own farm. In addition, Vietnamese people have prejudice, but it is to some extent also a matter of fact, that construction quality of apartment buildings is low, design is not suitable to Vietnamese living style, building management service is poor, and after all apartment is a depreciable asset. With landed house, in contrast, the owner can customize everything according to his/her style and condition. More importantly, landed house (land) is not depreciable, and supply is limited.
Prices for luxury apartments in HCMC or Hanoi range from about US$4.000-5.000 per sqm, high-end apartments sell for US$2.000-3.000 per sqm, mid-end apartments sell for US$1.000-1.200 while the low-end of the market can be as low as US$ 500 per sqm.
There are about 3,500 real estate and construction companies registered in Vietnam. But there are only few large construction companies such as Cotecons, Hoa Binh Construction who have sound project management team, skilful engineers and workers to deliver high quality services and timeliness of project completion.
All foreign corporations conducting business activities in Vietnam have to undertake their investment in accordance with the Law on Investment (2005). A foreign investor investing in Vietnam for the first time must have an investment project specifying, inter alia, the location of the project and required land area and land acquisition plan.