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Vietnam’s real estate market is warming up for a better future

Vietnam's foreign investment attraction needs to be planned

The Ministry of Construction (MoC) believes that Vietnam’s real estate market has overcome the most difficult period due to positive developments in the market as well as the whole economy in the fourth quarter of 2020.

  • Affected by the world-wide pandemic, Vietnam’s real estate market plunged for most of 2020, but now it’s recovering and getting momentum to rise. There are some reasons for this:
  • The European Union – Vietnam Free Trade Agreement (EVFTA) coming into effect and plans for the relocation of many multinational corporations to Việt Nam, according to the ministry.
  • Vietnam’s successes in pandemic suppression plays an important role to attract more foreign investment.

Those factors would set a good foundation for the real estate market to develop stably in 2021. In the fourth quarter of 2020, most businesses in the real estate sector have started operating again.

Although the market still faces many difficulties, real estate developers have offered solutions to attract customers like changing areas for developing property projects to catch up with trends of shifting FDI inflows and urbanization in localities outside big cities.

Thanks to product handover activities, project share transfers, asset liquidation and the development of industrial real estate, some real estate businesses gained record profits.

Nearly 80 large listed real estate companies achieved or exceeded their after-tax profit goals.

The domestic real estate market in the fourth quarter of 2020 strongly increased compared to the deep reduction in previous quarters of last year due to the rapid recovery of the housing and industrial zone segments, helping the property sector maintain positive growth for 2020.

In 2020, the real estate sector contributed about 4.42 per cent of national GDP.

Besides banking loans, property companies in 2020 attracted capital from other sources such as individual investment capital, remittances and capital from issuing stocks and bonds. While these solutions are better than bank loans, they are by no means easy since the world finance has severely damaged by the pandemic, stock investors are weakened and are not interested to big investment opportunities.

Some real estate corporations chose another solution: Carry out capital calling sections on digital financial platforms, since the digital economy is surprisingly strong-resistant to the world crisis. Moreover, there have been sharp increases of the market’s value in 2021, making it an ideal investment and trading ground.

Under this circumstance, blockchain fundraising service providers such as LiveTrade can help real estate companies issue their own digital tokens and can conduct faster, safer fundraising events on the digital market. One of our most recent project, the BDS token project on January 30th, 2021 was a cooperative project between a US-based fundraising company known as BDS Holding LLC and a Vietnamese real estate corporation called Big Group. The initial offering was a success with 3,000,000 tokens issued. The real estate market in Vietnam is recovering and soon, it will be taking off in the new context of 2021 economy. Moreover, if the companies can correctly apply digital technology to their investment and business model they can be the pioneer of a new world of finance.

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