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Foreign investment in Việt Nam's real estate surges
Strong foreign direct investment (FDI) inflows show the attractiveness of Việt Nam's real estate market in the eyes of foreign investors.
In the first 11 months of 2024, registered foreign direct investment (FDI) in Việt Nam’s real estate sector surged by 89.1 per cent year-on-year, reaching about US$5.63 billion, according to Avison Young Việt Nam’s ‘Việt Nam Real Estate 2024: A Year in Review’ report.
By the end of November, total registered FDI amounted to $31.38 billion, marking a modest 1 per cent increase year-on-year. Avison Young Việt Nam noted that FDI in Việt Nam in 2024 has slowed in line with global trends.
According to market insiders, this slowdown reflects the reality of Việt Nam's open economy as global FDI flows declined for two consecutive years (2022 and 2023) due to macroeconomic instability and geopolitical tensions.
Despite these challenges, foreign investors remain optimistic about Việt Nam's market potential, continuing to fund approved and licensed projects. Realised FDI for the first 11 months of 2024 was estimated at $21.68 billion, a 7.1 per cent increase year-on-year.
Experts predict that driven by this momentum and year-end disbursement efforts, Việt Nam's total realised FDI for 2024 could surpass last year’s record and achieve a new peak.
Of particular interest, amid the sluggish global production recovery and subdued major real estate markets, FDI flows into Việt Nam have increasingly targeted the real estate sector. This trend underscores the sector’s appeal to foreign investors.
Investors are attracted by Việt Nam's favourable policies, investment climate, demographics and urbanisation. They also see undersupply in key segments, including industrial and logistics, housing, office spaces and retail.
Industrial and logistics real estate, in particular, is of top interest to foreign investors. This segment leads in the number of real estate transactions throughout 2024.
Experts anticipate that clean industrial land, ready for long-term leasing with complete infrastructure and strong connectivity, will attract significant investment.
Additionally, e-commerce growth will drive demand for warehouses, pre-built factories and distribution hubs in well-connected areas near major urban centres.
The establishment of Việt Nam’s first AI centre by Nvidia also paves the way for a wave of high-tech industrial facilities. Foreign investors could further tap into opportunities in the data centre sector under the new Telecommunications Law.
“Transformative changes in 2024 regarding policies, investment trends and the business landscape provide a solid foundation for continued optimism about Việt Nam’s real estate market. As positive signals become clearer, it will be time to restart capital flows into transactions and prepare for the next growth cycle,” David Jackson, General Director of Avison Young Việt Nam, emphasised.
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