Issues linger in real estate but are being overcome

South Korea has long been among the leading investors in Vietnam. How do you view Vietnam’s investment environment for South Korean investors? What segments attract the most investment?

Vietnam has a lot of potential, such as a young population and quite high economic growth compared to other countries. Its people also work very hard, with some having two or even three jobs at the same time.

And South Korea is one of the leading countries investing in Vietnam, with major companies including Samsung, Hyundai, LG, Lotte, and SK contributing to the country’s GDP.

Do South Korean investors encounter any challenges when investing in Vietnam?

When South Korean investors engage in projects in Vietnam, they often encounter challenges related to document clearance. Additionally, the language barrier may arise, particularly in merger and acquisition (M&A) projects. Another significant concern voiced by investors is the lack of transparency in market information. This increases apprehension among investors. It is therefore crucial for the government to maintain consistency in policy implementation to facilitate and encourage South Korean investment in Vietnam.

How do you view Vietnam’s real estate market in recent times?

I acknowledge the challenges faced by the real estate industry in Vietnam. It’s not unique to Vietnam, and extends to other countries grappling with high interest rates. The repercussions of the Russia - Ukraine conflict have further intensified challenges, influencing an upturn in the real estate market. Vietnam’s real estate landscape is currently challenging. Nonetheless, I remain optimistic about the potential for improvement in the future.

What was South Korea’s experience in developing social housing?

There are many forms of financing required for real estate businesses, such as equity financing, partnership financing, and government financing, etc. In particular, social housing relies heavily on government financing. Due to its limited profitability and the need to provide affordable shelter for low-income earners, government initiation and financial support are crucial for its development.

Do you think South Korean investors are investing more in Vietnam’s real estate market?

South Korea has significantly increased its investments in Vietnam over the last decade. Building on this foundation, there is a strong likelihood that it will continue to invest more in the country. The prevailing belief among South Koreans is that Vietnam holds substantial economic potential, driven by its burgeoning young population. A widespread sentiment among South Koreans is the conviction that Vietnam’s potential is considerable, paving the way for increased future investments.

What do you think of the prospects for the market’s development in 2024 and subsequent years?

In 2024, the real estate industry is expected to witness a decline in interest rates compared to previous years. Despite some constraints on financial resources, the accelerated recovery and growth of Vietnam’s economy instills confidence in an overall improvement in the country’s real estate sector. The government’s dedicated efforts are instrumental in overcoming challenges, ensuring a positive trajectory for the industry’s development.