The future is bright for Real Estate Tech in Vietnam, due to the saturated condominium market in the prominent cities such as Ho Chi Minh City, Hanoi, etc. Experts see a lot of growth prospects in the commercial realty market
The flourishing middle class and a gradual transition from the communist economy to entrepreneurship and foreign investment have impacted the real estate sector positively in Vietnam. In the last couple of decades, industrial development has gradually reduced the economic dependence of people on agriculture, resulting in the significant growth of the service-related sector over a period.
The overall change in the financial profile has created a need for more residential, retail, commercial and office spaces in the country. According to reports, the investment in real estate in Vietnam grew 12% in 2016 in comparison to the previous year of 2015.
Use of technology became inevitable when foreign investment in real estate started increasing as real estate websites, and online portals reached out to buyers and investors across the border. The focus of the international investors has been mid-level to high-end residential properties. The top five countries that invest in properties in Vietnam are Japan (22%), Singapore (17%), South Korea (14%), United States (8%) and Hong Kong (7%).
Due to saturated condominium market in the prominent cities such as Ho Chi Minh City, Hanoi, etc. experts see a lot of growth prospects in the commercial realty market.
The realty tech sector has come up in these top cities where service industry has been developing, and economic activities have been increasing.
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Since major realty tech players are into the online listing and searching, they try to differentiate by the user interface, search options, property analysis and survey report along with news and features.
Real Estate in Vietnam and its impact on Real Estate Tech in Vietnam
According to a joint report by the PWC and the Urban Land Institute, titled, Emerging Trends in Real Estate Asia-Pacific 2017, “Vietnam is another emerging-market play that is drawing a lot of attention.”
Quoting one of the investors, the report says that Vietnam has potential to be ahead of any of the emerging markets from virtually all investors’ perspectives.
“Economically, the story is similar to China’s. The course it is charting covers similar ground, with a multitude of light manufacturing facilities producing goods for export. Growth in Vietnam is likely to accelerate primarily because it is seen as an ideal alternative to manufacturing in China, where costs are rising, and the business environment has become more challenging for foreign investors,” says the report.
It adds, “Rapid industrialization in Vietnam suggests that there should be scope for investments in logistics and business parks, but so far these sectors have yet to see significant momentum.”
Various newspaper reports on government housing policies indicate that the government will take the initiative to promote affordable housing initiatives. The center of economic activities in the country is Ho Chi Minh City which reports gross domestic product (GDP) growth of 7.5 percent year-on-year in the first half of 2016.
Investors say that office rentals in Ho Chi Minh City is higher than in Bangkok, which suggests a demand-supply mismatch situation and this will take the time to get addressed. Realtors blame red tapes in government approvals for the development of projects. Land, being a state subject, is difficult to get for any development be it commercial or residential without the due permission from the government.
Real Estate Tech in Vietnam
The overall startup ecosystem in Vietnam is at the nascent stage however it’s emerging very fast. After Singapore and Indonesia, Vietnam has become the third most happening startup countries in the Southeast Asia. According to various estimations, there are about 1500 to 3000 startups firms that have come in a couple of year’s time.
As far as the Real Estate Tech in Vietnam is concerned, the sector is limited to real estate website that offers listing, searching, and marketplace. The online realty portals offer users to create an account, post the details of properties, pictures, videos, and prices, etc. Some of them charge money to manage and segregate the content category-wise. However, othersites offer these services free of cost.
A lot of these sites started off as company’s online preto popularize their offline business however very soon they realize the potential of being an online marketplace. To popularize their business, all of them bank upon proper search engine optimization so that they can be prominently place in global and local search engines.
In a positive development, the realty tech sector has started attracting foreign investments as well. In last year in October 2016, newspaper reports said PropertyGuru, an Asian online property portal with a presence in Singapore, Malaysia, Indonesia, and Thailand, invested an undisclosed amount in real estate portal Batdongsan in Vietnam.
The reason behind the deal, as viewed by PropertyGuru, is to access the emerging real estate market in Vietnam. This Singapore-based website has itself raised US$183 million to date, and it claims to have 15 million users with annual transaction worth $15 billion.
After the collaboration, Batdongsan hopes to get support and capitalization along with the exchange of new technology which will strengthen their presence in the real estate market in Vietnam.
Batdongsan is of the view that the new technology such as virtual reality and the use of the drone to get the 360-degree view of any real estate project will make property search more efficient and innovative.
Top Startups in Real Estate Tech in Vietnam
Entrepreneurs in Vietnam have worked hard to use technology to reach out to prospective buyers in all possible manners despite a lot of challenges at home.
Online Realty Portals: There are mainly online portals that offer services that include listing, searching and marketplaces. Prominent among them are Batdongsan, Muabannhadat, Dicoconline, Zita, Dothi, Nhadat24h, 123nhadat, Cafeland, Dinhgianhadat, Kenhbds just to name a few.
According to CrunchBase, Batdongsan has currently 100,000 daily website hits with 500,000 page views. Besides this, the site offers up-to-date information on thousands of real estate information and latest news about the housing market.
“We serve more than 2 million users visiting the website to find information about properties,” clams Muabannhadat, another leading real estate platform in Vietnam.
It adds, “Muabannhadat has efficient and flexible advertising solutions for property developers, property agencies, and industry advertisers; to help bring quality leads to their businesses. We specialize in advertising and marketing solutions for real estate.”
Dicoconline also offers the online real estate network with an extensive real estate database, the wide range of clients and active collaborations with other real estate stakeholders.
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The company claims to covers all features in the industry: market research; offline trading-floor network; property marketing and distribution; and asset management and leasing.
“DiaOcOnline is the only real estate website that can charge for listings, making its database the most reliable and accurate one available,” says the company.
It adds, “The company network has 72,964 active users with 1,800 new registered members each month, more than 310,000 properties in its database and about 1,000 new listings every day.”
Another online realty firm Dot Property claims, “We offer property developers, real estate agents, homeowners, renters property searchers a comprehensive property portal to buy, rent or sell property online – and all with the option to list your property for free.”
Co-working spaces: The co-working sector emerged in 2015 when Toong in Hanoi and Dreamplex in Ho Chi Minh City started first co-working space chain. After that, a lot of new players have entered the market in 2016 and 2017, and this new co-working development is the result of an encouraging entrepreneurial eco-system in the country.
Up is another new co-working player who entered the co-working spaces in 2016 and developed a hub at the Hanoi University of Science and Technology.
Way forward for Real Estate Tech in Vietnam
The booming property market and high profile mergers and acquisitions have thrown up a plethora of opportunities for technology to improve the service-sector and client services in the realty market. Property experts say that the realty market will witness massive investments in residential, commercial hotel and industrial sectors all across the country and increasing tourism industry will further help the market to grow fast.
To expand the business and make the profit from the growing realty market, entrepreneurs need to tap the innovative technology in every sphere of property transactions.
The construction industry has to leverage the latest technology such as 3D printing to revolutionize the project completion which can reduce the period for a multi-storied residential project significantly.
Use of virtual reality can help investors and buyers access the micro aspect of a project sitting at home. With the aid of tracking mobile applications, investors can see the every minute of the progress of a project on the go from any part of the world.
Real Estate Tech in Vietnam : Conclusion:
The positive economic forecast, stable political environment, and Vietnamese currency Dong have boosted the confidence of international investors to enter the property market. Besides these, some latest international developments, such as the change in governance in the United States and UK’s decision to part ways with the European Union, have forced the investors in these countries to look for comparatively more stable and profitable investment opportunities which Vietnam offers.
An emerging popular investment destination, Vietnam realty tech sector is quite promising in the near future.
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