Startups with low investment

Deputy PM Vu Duc Dam urges scientific-technological breakthroughs for national development

April 14, 2021 by en.qdnd.vn

He said there are many things that need to be done to turn science-technology into the driver and a source of power of the economy, but the first task is to digitalise and use information technology to enable connectivity in management. Obstacles in financial mechanism should also be removed, the Deputy PM added.

Minister of Science and Technology Huynh Thanh Dat affirmed that the ministry will continue to work with relevant agencies to build specific mechanisms for developing science-technology.

Deputy Minister of Science and Technology Le Xuan Dinh reported at the meeting that science and technology has contributed greatly to national development, as seen in the growing contribution of the total factor productivity (TFP) to national economic growth, from an average 33.6 percent in the 2011-2015 period to 45.2 percent in the 2016-2020. The country’s Global Innovation Index (GII) was ranked 42nd among 131 countries and territories, third in ASEAN and topped the group of nations with the same level of income.

The country has begun to form an innovative startup ecology with around 3,000 innovative startups, which attracted approximately 1 billion USD of investment in the past two consecutive years.

Investment in science-technology now comes from both the State budget (52 percent) and businesses (48 percent) instead of relying entirely on the State like 10 years ago.

Source: VNA

Vietnam’s labour market to recover as half of companies look to increase headcounts

April 14, 2021 by www.vir.com.vn

Prospects are bright for Vietnam’s labour market this year

The report also reveals that 58 per cent of those employed anticipate looking for new job opportunities, while another 34 per cent are passively open to new roles. Around 10 per cent expect a zero pay increase from their current salary for new job offers.

The insights in this report are derived from a regional survey that covers 12 Asia-Pacific markets. The responses came from over 5,500 businesses and 21,000 employees, of which 3,500-plus are directors or CXOs.

Mark Donnelly, director of Michael Page Vietnam says, “By all accounts, Vietnam has weathered the COVID-19 pandemic better than many of its neighbours in the region. Its tight and swift control of the situation not only kept the number of cases low by comparison, Vietnam’s economy, too, remained in a relatively good shape over 2020. While multinational companies based there were cautious on the recruitment front, domestic companies took the opportunity to ramp up their hiring activities and secure the best available talent.”

“Our Talent Trends 2021 report reflects vital market insights for the next 12 months ahead of us. Acquiring and retaining high potential talent will be crucial for future growth. We saw many businesses looking to prevent employee cuts and redundancies as much as possible during the pandemic. And several industries are already showing signs of a healthy recovery,” he said.

This was evident especially among Vietnam’s burgeoning technology sector. Startups and e-commerce, for example, operated unabated throughout the year, and hiring demands within those sectors were healthy.

In recent times, Vietnam’s efforts to position itself as a hub for software development also paid off in 2020, with markets like Japan, Hong Kong, China, and South Korea investing heavily into the country’s technology sector. Despite a slow year for manufacturing, Vietnam still saw a record year in terms of export surplus – a positive indicator for the road ahead.

Looking ahead, Vietnam is well-positioned to bounce back from the impact of COVID-19. In the meantime, businesses are well-advised to focus on employee engagement and well-being, ensuring that the entire organisation is poised for the recovery phase and beyond, according to Donnelly.

By Thanh Van

Despite growing demand in Ho Chi Minh City, supply of affordable apartments flatlines

April 14, 2021 by tuoitrenews.vn

Ho Chi Minh City has seen a nominal number of new affordable housing projects in the past five years, which has greatly frustrated the road to homeownership of the city’s up-and-coming young workforce.

As per Vietnamese law, social housing is put under strict regulations, where hopeful buyers must meet a score of criteria to become eligible for purchase.

Members of the general public are resting their best hopes on privately-developed affordable housing projects, yet the category is finding itself in a tight corner of the market, catching little interest from developers.

Fizzling supply

After the housing bust that haunted the domestic market from 2009 to 2013, Ho Chi Minh City and the surrounding locales observed a surge of housing projects from low- to mid-tier range, as 78 percent of the new housing projects in the area in 2017 were classified as B- or C-tier, according to a report from the real estate firm DKRA.

As per Vietnam’s Circular 31/2016, qualified apartment buildings are ranked in three tiers, with A signifies the highest standard, B the midpoint, and C the lowest possible, often associated with affordable housing projects.

However, in their report on the Ho Chi Minh City housing market in the third quarter of 2018, DKRA pointed out that supply of new C-tier apartments shrank to two percent.

By 2020, these numbers had almost gone to zero, while new high-priced units had dominated the market with 69 percent, the consulting firm said.

Meanwhile, the cost for the supposedly affordable housing units is rising over the typical workers’ heads, with the rate for an average C-tier unit going from VND16 million (US$700) per square meter to more than double that figure last year, which means a 15-20 percent increase per annum.

In the first three months of 2021, high- and mid-priced apartments were still seen taking over the market, while supply of affordable units remained scarce.

Buyers on a budget in Ho Chi Minh City are having a hard time finding listings at the price below VND35 million ($1,516) per square meter, as apartments in neighboring Binh Duong and Dong Nai Provinces have already soared to VND33-45 million ($1,429-1,949) per square meter.

A recent research of the Ho Chi Minh City Real Estate Association also confirmed the dominance of high-end housing projects, which covered 70 percent of the market, while mid-tier developments accounted for 25 percent.

Meanwhile, affordable housing only makes up one percent, or 163 projects, out of all housing projects in Ho Chi Minh City and surrounding areas that called for investments in 2020.

This proves an indication of the imbalanced development of the local real estate sector, which bodes a dubious future of unsustainability.

A house of 36 square meters wide that accommodates 10 people in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre

An apartment of 36 square meters in area accommodates 10 people in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre

The great hunt for homes

For the time being, the interest rate for private home loans, with no favorable conditions applied, floats at 10-11 percent per year.

At this rate, a loan of VND1 billion ($43,332) over a 10-year term would require VND200 million ($8,664) in compound interest per year.

In case of a future hike in interest rates, the total interest to be paid in 10 years could easily equate, even surpassing the initial loan amount.

Duc Minh, a father in Tan Phu District of Ho Chi Minh City, said a loan like above would require the combined income of his and his wife’s to reach at least VND30 million ($1,308) per month, as he still has to pay for food, schooling bills for his children, as well as saving for unexpected events.

“This is why we’ve been on the fence [about taking out the loan,] while the housing price is still skyrocketing,’ he said.

According to Minh, an apartment of 60 square meters in the outlying districts of Ho Chi Minh City would cost at least VND2 billion ($86,664), which is totally out of his financial capacity at this moment.

Khoi, a resident of Thu Duc City under Ho Chi Minh City, said he is scrambling to find an apartment in suburban districts with his budget of VND1.5 billion ($65,000).

“I feel like entering an unfair race between homebuyers and the market price. The rate always rises two or three times faster than I can save,” he stated.

Khoi attributed the phenomenon to the swing investors, who cram sales opening events of housing projects to buy and pump the price up, which will drive people with actual demands to find a place to leave the game.

Construction site of an apartment building project in Thu Duc City under Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre

The construction site of an apartment building project in Thu Duc City under Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre

Manufactured hype

Last year’s skyrocketing cost of housing in Ho Chi Minh City can be accredited to developers’ choice to create supply scarcity, as well as a high demand for housing as investment property, which took up as much as 70-80 percent of units in new apartment projects.

On top of that, accompanying fees for land and legal procedures have pushed up real estate prices in the southern city, said Su Ngoc Khuong, senior director of investment at the real estate firm Savills.

Over the past three years, a real estate upswing in the southern metropolis has been recorded every year after the Lunar New Year holiday, which usually takes place in late January or early February.

“It’s just manufactured hype, as realistic transactions are very low,” said Pham Lam, deputy president of the Vietnam Association of Realtors.

“Real estate brokers are complaining as they have been facing struggles to sell for months.”

Regarding the recent real estate fevers, Lam pointed out that they all stem from insider reports of new master plans for development, which could drive prices of local land through the roof.

However, these information sources are usually manipulated by a powerful few, who seek to profit from the market mania on which they have the upper hand.

Lam also pointed out growth in idle money among Ho Chi Minh City citizens, as well as high hopes among speculators for the real estate market in a period of economic recovery, as reasons for the housing boom.

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