Meanwhile, a large proportion of FDI capital in 2016 went to real estate projects, while the same thing is believed to continue in 2017.

 

Tran Kim Chung, deputy head of CIEM, commented that there were not major hallmarks in the financial market this year. 

 

A report of the State Bank’s HCMC Branch showed that 22 percent of overseas remittances goes to the real estate sector, 72 percent to production and business and the remaining to other fields.

The VN Index of the Vietnam’s stock market at the end of 2016 exceeded the 650 threshold set since 2009.

 

The total capitalization value of the stock market has increased from 32.4 percent of GDP in 2015 to 40 percent in 2016. The total market value of the investment portfolios held by foreign investors has increased by 20.7 percent by the end of 2016 compared to the end of 2015, reaching $19.55 billion.

 

The interest rate has decreased and nearly bottomed out. The lending is estimated to increase by 18 percent in the year.

 

The State Bank released Circular 06 which tightened control over the credit flow to the real estate sector. 

 

The state’s revenue from land and houses has increased by 32.6 percent over estimates, of which receipts from land use increased by 28 percent and the tax on agricultural land use rose by 38.7 percent.

 

The number of real estate businesses has increased by 99.1 percent, while registered capital has increased by 242.5 percent.

 

According to Chung, the real estate price in the primary market has increased by 5-7 percent compared to earlier this year, while the price in the secondary market has increased by 10-15 percent.

 

Transactions in the real estate market became busy in the second half of the year. He cited a report as saying that in the apartment market segment, the absorption rate is up to 80 percent, the highest rate in four years.

 

As the market has warmed up, the scale and value of projects has increased. The number of medium- and high-end real estate products is far higher than low-cost properties.

 

Regarding market prospects in 2017, Chung said the market fervor would be less intense because of a decrease in speculation. Banks’ lending to the real estate sector will also be decreasing.

 

Su Ngoc Khuong from Savills Vietnam said the housing market segment may encounter difficulties, but other segments such as office and retail premises will still see strong rises.

 

He noted that some real estate developers have jumped into the low-cost market segment as they realize that more young people want to be independent from their parents.