Rumor has it that land prices in eastern Hanoi, including Long Bien and Gia Lam districts, has been escalating daily. VietNamNet has found out that there is no land price fever.

The competition in the high-end office segment in western Hanoi will become stiffer over the next two years. The change will be sparked by Keangnam Hanoi Landmark Tower and Charmvit’s Grand Plaza coming online.

A survey on Viet Kieu (overseas Vietnamese) investment at a conference on establishing the Overseas Vietnamese Businesses’ Association revealed that most wish to invest in real estate.

According to a report by UK real estate service provider Savills, only around 1,800 of 9,000 apartments available in Ho Chi Minh City were sold in the first three months this year, down 48 percent from the final quarter of 2009. The market is still gloomy, the company said.

While apartments were the choice of many property buyers it appears tastes are changing and instead people are wanting street-fronted houses.

Real estate is swiftly becoming the most attractive investment opportunity for Vietnamese financiers, especially as other areas of development become pricier and less desirable to investors.

“Vietnam is beginning experiencing large town developments like South Korea. For example, the marvelous master plan community like Hanoi’s Ecopark is a new type of development where community can assess wide range of services and there are different types of housing.”

Vietnam’s housing law is the first law to set out a comprehensive legal framework for the ownership, lease, use and management of houses, including apartments, by local and foreign individuals and organizations. The law was adopted by the Vietnamese national assembly on 29 November 2005 and became effective on 1 July 2006. Given the scattered state of prior regulations and the surge in property development activities in Vietnam, the new law is a welcome clarification of the rights and obligations of the parties to housing transactions.

Our sources - across the three different cities - are adamant that rental rates will stabilize in the coming year and rise in 2011. For the time being, we assume that this is what will happen because the government mandates it. To a certain extent, the government and its agencies will be able to increase the amount of office space (and, perhaps, industrial space) that they are occupying. However, the likely consequence is that vacancy rates will remain high. In essence, it appears that official policy will be to keep rental rates (and probably prices and capital values) above market-clearing levels.

Foreign investors will start to shift investment from HCM City to Hanoi this year, says Marc Townsend, managing director of Property services and consulting firm CB Richard Ellis (CBRE) Vietnam Co.