Hoang Hai, Vice Chairman of the State Securities Commission, said the commision has ordered a stop to a program whereby VPS Securities was selling shares for as little as VND 10,000 or US 39 cents in individual real estate projects. The Vice Chairman said “The Securities Commission has monitored this model and found that this is a quite risky form of investment,” according to CafeF.
In the current economic climate, with deposit interest rates at historic lows, the local gold price much higher than the world gold price, and US dollars prices cresting all-time highs against the local currency, the need for a diversification of investment vehicles for Vietnamese consumers is becoming increasingly clear.
Furthermore, Vietnam’s real estate market has been struggling to access capital on the back of a myriad of challenges the industry has faced in the past two years or so. In this context, this real estate crowdfunding program had a lot of potential.
Of note, real estate crowdfunding has become popular all around the world in line with a broader democratization of the finance industry. With this form of investing realised in most developed markets, it will be interesting to see what risks for Vietnam the SSC has identified.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked