Tumbling stocks and gold prices may drive investors away to the real estate market as property is traditionally a favourite channel for investment in Vietnam compared to gold, stocks and bank savings, according to a report by CBRE Vietnam on August 26. Once the United States made a liftoff in interest rates, causing the increase of the US dollar as well as pressure on gold price, local investors with savings in Vietnam dong would shift their interest to property investment opportunities, especially those with immediate rental income or guaranteed yield, to retain their net worth amidst persisting currency fluctuation, the report said. Property and real estate advisers noted that the residential property market in Vietnam is dominated by domestic supply while foreign suppliers only account for less than 10 percent of the market share; hence property prices have been affected by supply and demand rather than currency movement. There will be pressure on future property projects with imported materials to increase selling prices due to a hike in the average interbank VND/USD exchange rate which results in higher costs, especially if costs are denominated in US dollar. The same pressure is also on foreign developers who need to ensure their target profit in US dollar is met. However, this would have limited impacts on the market overall, given little supply by overseas developers in the market. According to CBRE, foreign buyers might be less influenced by a cheaper VND as Vietnam’s properties are considered quite attractive for relatively lower prices and higher yield compared to neighbouring countries, such as Thailand, Singapore and Hong Kong. They are more interested in what and how they can buy, rather than prices.-VNA