According to the study, 27 percent of respondents ranked Vietnam’s trained labor as one of the most appealing features for foreign enterprises, highlighting the country’s desirability as a manufacturing base. 

The same percentage is drawn to Vietnam’s expanding consumer market, emphasizing the allure of rising consumer income. Meanwhile, 23% believe that the country’s rising digital economy is a crucial selling factor for foreign corporate expansion. 

Many respondents stated they were drawn to the country because of its high smartphone penetration rate and thriving start-up scene. 

According to Tim Evans, CEO of HSBC Vietnam, the country, which has become known for its quick economic growth, also stands out as one of the best performers in the ASEAN area due to its excellent economic resilience during and after the COVID-19 pandemic. 

Tim Evans noted that the country’s resiliency, together with its hardworking, competent workforce and attractive cost structures, continues to attract significant foreign direct investment (FDI). 

However, Vietnam is more than an “FDI in, export out” story. The country’s rapidly increasing middle class is also a great potential for multinational corporations eager to get into the consumer story that will see Viet Nam become the world’s tenth largest consumer market by 2030, he observed. 

“Despite some short-term headwinds, Vietnam remains an attractive destination for foreign businesses, and we continue to see very strong interest in the Viet Nam story from customers across the HSBC network,” said the CEO of HSBC Viet Nam. According to new research commissioned by HSBC, international businesses from nine major economies are becoming more enthusiastic about their growth prospects in Southeast Asia. 

They anticipate 23.2 percent growth in the region’s sales over the next 12 months, compared to 20.1 percent in the previous year’s survey, and 4-5 times the pace of GDP development in Southeast Asia. This demonstrates foreign firms’ growing trust in the region. 

HSBC commissioned an online survey of 3,509 enterprises from nine markets: mainland China, India, the United Kingdom, France, Germany, the United States, Australia, Hong Kong, and GCC countries (United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman, and Kuwait). 

Respondents to the survey were key decision-makers from companies with an annual revenue of at least $5 million that are already doing business in Southeast Asia or are considering doing so. The survey was open from July 25 through August 2, 2023.

Vietnam Real Estate Association (VNREA) polls show that social housing investors and buyers must take out high-interest loans. Investors pay 8.7% and homebuyers 8.2% annually. Buyers and investors are struggling with these interest rates.

The loan package of VND 120 trillion, according to Le Hoang Chau, Chairman of the HCM City Real Estate Association (HoREA), does not match the conditions of a preferential credit package for social housing. A preferred financing package for social housing projects must meet two critical criteria: a low-interest rate and a long repayment period.

Chau claims that when compared to low-income people’s financial capabilities, the average interest rate commercial banks charge buyers is still too high. 

According to Nguyen Chi Thanh, Deputy Chairman of the Vietnam Real Estate Brokers Association, interest rates for qualified buyers of social housing projects remain high. At the same time, buyers of social housing have substantially lower incomes than real estate prices.

As a result, Thanh believes that interest rates for homebuyers must be reduced.

Many studies show that workers’ earnings are frequently quite low. According to the Vietnam General Confederation of Labour, 75% of them must borrow money to cover their living expenses. They are unable to purchase social housing since the loan interest rate is 8.2% per year.

Someone with a steady monthly salary of VND 12 million must repay the loan at a high-interest rate over a period of up to 37 years.

He claims that if they can borrow at a lower interest rate of approximately 4.5% per year, the payment term will be reduced to about 19 years.

VNREA has recommended a 6% annual interest rate for social housing developers and a 4.5% annual interest rate for homebuyers, which is lower than the current rates of 8.7% and 8.2%.

In addition, VNREA suggests that the state implement appealing policies for investors, such as land plots, investor selection, and land allocation. The time required to complete investment procedures should be reduced from 24-36 months to 12 months.

VNREA advises real estate companies to rearrange their goods and select housing categories based on buyer income and market demand. They must also strengthen their corporate governance capabilities and re-determine the selling price.

At the same time, they must strictly adhere to investor agreements.

According to the Ministry of Construction, around 108 social housing projects are now being invested in and built.

Based on reports from 11 provinces and centrally-run cities, the ministry has issued a list of 24 eligible projects to participate in the 120 trillion VND credit package. These projects have a total investment capital of 31.67 trillion VND. The borrowing need for the projects is 12.44 trillion VND.

Ten projects of social housing and housing for industrial park workers began development in the first seven months of this year, totaling 19,853 units.

Source: Vietnamplus