FDI push has positive impact on real estate

Notably, the FDI capital realized in Vietnam in the first 8 months was announced by the General Statistics Office to reach about 14.15 billion USD, an increase of 8% over the same period last year and the highest in the past 5 years.

Foreign investors invested in 18 out of 21 sectors of the national economy. Of which, the processing and manufacturing industry took the lead with a total investment capital of nearly 14.17 billion USD, accounting for more than 69% of the total registered investment capital, up 7.4% over the same period. The real estate business continued to maintain the second position with a total investment capital of more than 3.36 billion USD, accounting for nearly 16.4% of the total registered investment capital, up 77.6% over the same period.

If including newly registered capital and adjusted registered capital of licensed projects from previous years, the registered foreign direct investment capital in real estate business activities currently reaches 2.55 billion USD, accounting for 14.4%. In terms of the real estate industry, Mr. Neil MacGregor - CEO of Savills Vietnam said that infrastructure is an important factor in attracting foreign capital.

“Savills noted that a number of new residential real estate projects have been launched, mainly in non-central areas where economic growth is rapid due to manufacturing activities. It can be said that FDI is an essential factor for the real estate market in all sectors, especially industry,” - Neil MacGregor cited.

From another perspective, Mr. Michael Kokalari - Chief Economist of VinaCapital commented that Vietnam is gradually improving its position on the global value chain. Currently, Vietnam is still in the stage of importing complex industrial production details and using cheap labor to assemble the final product.

However, with the increase in FDI, Vietnam is learning the techniques to produce more complex products itself, capturing more value for the domestic economy. This development path is similar to the East Asian development model pursued by Japan and South Korea. This strategy has also proven effective - the expert shared.

According to Mr. Michael Kokalari, there are currently three key factors driving Vietnam's rapid economic growth, including rapid industrialization thanks to FDI capital flows, the rise of the middle class, and special geopolitical strengths.

“Vietnam has been very successful in building good relationships with both the United States and China. In the region, only Vietnam and Singapore can balance the position between the two powers. This is the premise for strategic opportunities for industrialization and economic growth,” commented Mr. Michael Kokalari.