Vietnam’s apartment market is expected to maintain its red-hot feel in 2010.

Savills Hanoi director Matthew Powell said the apartment segment would remain hot, because supply was limited and demand would remain high amid a backdrop of rapid urbanisation.

“We can say that Vietnam’s property market is a shifting one. However, Savills looks forward to an exciting 2010, with Vietnam positioned to take full advantage of the economic recovery,” Powell said.

Local investors, said Powell, would remain active over the next 12 months, with a growing number of transactions completed by foreign investors.

“Despite all the challenges investors may face, opportunities are available. However, to succeed they should always complete thorough due diligence before committing funds, employ experienced professional consultants with a long-term Vietnam presence, consider working with an experienced local development partner and open an office in Vietnam,” he added.

Marc Townsend, managing director of the CB Richard Ellis, said the residential market would offer good investment returns.

“It is obvious that housing for people with low incomes has always been a hot topic. For people with an average income, demand for houses always exists at a high level. Nonetheless, demand for premium apartments is also considerably high,” he added.

Townsend said in a recently released CBRE report that the market was exciting as demand had come back in a big way with most of projects recently launched in Hanoi such as Mulberry Lane and Le Van Luong Residentials selling all units.

Townsend said individual investors saw residential sector as good investment and that’s why there was strong initial interest by investors.

He added that projects which had reasonable prices would attract end users who have real demand for accommodation.

Andrew Brown, country head of Jones Lang LaSalle, said over 2010 and 2011 Vietnam’s residential market would be heavily favoured by investors.

Brown said sensible development would stop the market from hitting saturation point.

Townsend said investors should multiple income classes and provide housing for different target markets.

Savills figures show that in Hanoi, from the end of 2009 up to 2012, it is estimated that there will be at least 10,000 apartments launched.

Of those, nearly 34 percent will be in Tu Liem district and approximately 30 percent in Cau Giay district. In HCM City, about 87 planned projects are expected to come to the market in the next three years.

Savills predicted that if these planned projects arrived on schedule, the total supply of apartments for sale would double.

District 7, exploiting the advantage of the Phu My Hung new urban town, will contribute about 26 percent of HCM City’s future supply.

Districts 2 and 9 have the advantage of an improving transportation system, available land and the presence of a hi-tech industrial park in District 9 that is being developed. According to Savills, these two districts could be the main suppliers for the HCM City apartments in the mid-term and account for about 25 percent of the southern hub’s future supply over the next three years.