It's time for Hanoi to take centre stage

Marc Townsend views Hanoi as the bridesmaid of Vietnam's property market. Recalling how early foreign investors in the mainland's property market tended to go straight to Shanghai, bypassing the capital, Beijing, he sees a similar story in Vietnam, with Ho Chi Minh City being the beneficiary.

Yet Townsend, managing director of property services and consulting firm CB Richard Ellis (CBRE) Vietnam, predicts a market shift this year, with Hanoi set to shine.

Underscoring his optimistic outlook is Vietnam's economic fundamentals. The country maintained positive GDP growth amid the global economic turbulence, Townsend says, noting it is one of the few countries in Asia with strong positive economic growth.

Vietnam was the only Asean country to increase quarter-on-quarter growth rate last year, up 5.9 per cent for the whole year. It recorded the third quickest post-economic tsunami recovery after China and India, beating other Southeast Asian neighbours.

Even though Foreign Direct Investment (FDI) into Vietnam dropped last year, compared with 2008, it was still the second highest year on record at US$21.48 billion. Investors are returning and, this year, FDI is tipped to reach US$22 billion to US$25 billion. Gold prices are consolidating, and the stock market is expecting more foreign funds to flow in this year.

Townsend adds that confidence in the Vietnamese currency, the dong, is improving. 'There is still devaluation pressure in the short term, but stability should return on export strength and reduction of the government stimulus.'