Potential Investment Channels for Remittances to Vietnam in 2025

According to previous posts by FinFan, remittances to Vietnam have been steadily increasing each year at an impressive rate.

Statistics from the State Committee for Overseas Vietnamese reveal that from 1993 to the end of 2022, remittances to Vietnam exceeded 190 billion USD, almost equivalent to the disbursed FDI during the same period. Including estimates for 2023, the cumulative total reaches approximately 206 billion USD.

In a recent blog post, FinFan also highlighted the real estate investment channel and its potential for overseas Vietnamese investors globally.

Over the past few years, the Vietnamese government, particularly in Ho Chi Minh City, has implemented appropriate policies to improve the supply and demand of this high-value asset class.

These efforts aim to facilitate the flow of remittances into Vietnam and provide greater access to this investment channel.

Apart from real estate, what other investment channels could attract remittances to Vietnam in 2025? Join FinFan in analyzing these opportunities in the following article.

Real Estate Market as a Key Channel for Remittances to Vietnam

Housing Demand and Supply Dynamics

According to the May 2024 real estate market report from the Dat Xanh Services Institute of Economic-Finance-Real Estate Research (DXS - FERI), new housing supply experienced a decline, reaching only about 38.5% of April’s new supply, mainly within the mid- to high-end apartment segment.

The total primary supply saw a slight decrease of 0.73% compared to April, reaching 47,458 units.

The supply in June is expected to improve and offer a more diverse range of products, drawn from projects that have been marketed but not yet launched.

Another report from VNEconomy indicates that in the first half of 2024, the total housing supply experienced significant growth, increasing by 182% compared to the same period in 2023 and by 46% compared to the end of 2023.

Additionally, according to Mr. Pham Anh Khoi, Director of FERI, the housing market demand has shown positive signs.

The overall absorption rate across the market increased nearly 2.5 times compared to the same period in 2023. Absorption rates are noted to grow steadily across quarters, particularly in the months following the Lunar New Year.

The Northern region, especially Hanoi, continues to lead with the highest sales performance, surpassing other markets. Demand for apartment rentals in central areas and satellite urban zones is also on the rise, reflecting the recovery and growth of the real estate market.

Furthermore, primary sale prices have increased by 5-10%, with the apartment segment seeing the highest average growth, reaching up to 20%. Notably, in Hanoi, condominium prices have surged by an average of 30-40%.

In the secondary market, although some distressed sales remain, prices have slightly risen across most product types, with a substantial increase in standalone townhouses.

Similarly, rental prices have increased by 5-10%, especially in the apartment segment. These trends indicate gradual stabilization and growth in the market.

Outlook for 2025 Remittance to Vietnam to Invest in Real Estate

These figures indicate that the real estate market still has significant growth potential following the impacts of COVID-19 and the global economic crisis caused by conflicts and wars in certain regions.

With Donald Trump taking office as the 47th President of the United States, his policies are expected to help reduce or potentially end unjust wars worldwide, providing further support for economic stability and growth.

This also highlights the potential for remittances flowing into mid- and high-end housing in Vietnam, given the high utility and functionality of these properties. Such homes can serve multiple purposes, such as residential rentals or, in the case of ground-floor units, as shophouses, making them attractive investment options.

Vietnam’s Stock Market as a Growing Channel for Remittance to Vietnam for Investment

Current Stock Market Performance

According to the information from the article on Thanh Nien Newspaper on 7th of November 2024, the Vietnamese stock market (VN-Index) closed yesterday's trading session in the green. The VN-Index increased by 15.52 points, or 1.25%, to reach 1,261.28 points.

The HNX-Index rose by 2.91 points (1.29%) to 227.76 points, while the UPCoM-Index gained 0.87%, reaching 92.71 points.

The market's trading value also saw a significant increase, totaling nearly 15.869 trillion VND, up by almost 30% compared to the previous session. Not only in Vietnam, but global stock markets also experienced a positive trading session.

According to financial investment expert Phan Dung Khanh, the increase in both the U.S. and Vietnamese stock markets following the aforementioned results was expected.

Similarly, regarding gold prices, investors have been taking profits with a "buy the rumor, sell the fact" strategy, as they have achieved their anticipated returns.

Additionally, the rise in the global USD, with the USD-Index reaching 105 points at one point, has contributed to the decline in gold prices.

According to the World Gold Council, in the last four U.S. presidential elections, gold prices did not experience significant short-term fluctuations.

Forecast for 2025 Remittance to Vietnam to Invest in Stock Market

As remittances to Vietnam continue to grow, a notable shift is expected in how overseas Vietnamese investors allocate their funds.

With the rise in market optimism, particularly following global economic recoveries, an increasing number of remittances are forecasted to flow into Vietnam's stock market in 2025.

The Vietnamese stock market has demonstrated positive growth in recent months, with the VN-Index, HNX-Index, and UPCoM-Index all showing impressive gains.

The market's upward momentum, combined with the broader economic recovery, is expected to continue attracting foreign and domestic investors.

This trend is likely to be further fueled by favorable government policies and the potential stabilization of global markets.

In 2025, remittances are likely to be directed towards diverse sectors in the Vietnamese stock market, including real estate, technology, and manufacturing.

Investors are expected to seek out high-growth opportunities in these sectors, spurred by strong fundamentals and the market's ongoing expansion.

In addition to the stock market, remittances may also support other investment avenues in Vietnam, such as real estate and bonds.

However, the stock market is anticipated to be a primary focus, as it offers both short-term liquidity and long-term growth potential for overseas investors looking to capitalize on Vietnam's dynamic economic prospects.

Overall, the outlook for 2025 suggests that remittances to Vietnam will play an increasingly significant role in driving investment activity in the country's stock market, contributing to its continued development and integration into the global economy.

Precious Metals: Trends and Possible Impacts on Remittance to Vietnam Channels

Current Gold Market Volatility:

Also in the same article on Thanh Nien, there are insights about gold prices in 2025. According to the report, the sharp decline in global precious metal prices has impacted gold prices in Vietnam.

While the price of SJC gold bars remained stable at 87 million VND per tael for buying and 89 million VND for selling, the price of gold rings on the market dropped significantly.

Specifically, SJC bought 4-number gold rings at 86.4 million VND per tael and sold them at 87.9 million VND, a decrease of 300,000 VND from the morning but a total drop of 600,000 VND compared to the previous day.

PNJ (Phú Nhuận Jewelry Company) bought at 87 million VND and sold at 88.2 million VND, down 300,000 - 400,000 VND; Doji Group bought at 87.3 million VND and sold at 88.4 million VND, down 100,000 - 200,000 VND.

Compared to the peak of 89.5 million VND per tael last week, each gold ring has now "lost" more than 1.5 million VND.

The contrasting movements in the stock market and gold prices are believed by many financial experts to be a reaction to Donald Trump's victory in the U.S. presidential election.

According to financial investment expert Phan Dũng Khánh, the impact on gold prices will be medium- to long-term after the election concludes.

However, statistics from the World Gold Council also show that gold prices have fluctuated differently during each U.S. presidential term.

During the presidency of George H.W. Bush (1989 - 1993), gold prices dropped by 19%. Under his son, George W. Bush (2001 - 2009), gold prices increased by a remarkable 215%.

During President Barack Obama's term (2009 - 2017), gold prices rose by 44%, and in the last three presidential terms, gold prices have consistently increased, Khánh noted.

Prospective Role in 2025 of Remittance to Vietnam to Invest in Gold and Precious Metal

Remittances flowing into gold investments could become a prominent trend in response to potential future market volatility, particularly as gold is traditionally viewed as a safe-haven asset during times of economic uncertainty.

The global economic landscape is constantly evolving, with geopolitical tensions, inflationary pressures, and market fluctuations affecting investor sentiment.

In such environments, remittance recipients, especially those with conservative investment preferences, may increasingly turn to gold as a means of protecting their wealth.

Gold as a Safe-Haven Asset:

Gold has long been regarded as a reliable store of value, especially in periods of economic instability.

Unlike currencies, which can be influenced by inflation or devaluation, or stocks, which are susceptible to market volatility, gold tends to maintain its value over the long term.

This characteristic makes it particularly attractive to individuals looking to safeguard their financial assets amid unpredictable global events, such as political upheavals or financial crises.

The Role of Remittances:

Remittances represent a significant source of income for many families worldwide, particularly in countries like Vietnam, where large numbers of citizens live and work abroad.

When faced with market uncertainty or currency devaluation, recipients of remittances may seek to convert their incoming funds into assets that offer greater security.

Given the historical performance of gold as a hedge against inflation and financial instability, many recipients may opt to allocate a portion of their remittances into gold-based investments, such as gold bars, coins, or gold-backed securities.

Attractiveness to Conservative Investors:

Gold's appeal to conservative investors lies in its stability and low correlation with other asset classes.

For remittance recipients who prioritize preserving capital rather than seeking high-risk, high-reward investments, gold offers an ideal solution.

Unlike stocks or real estate, which can experience significant fluctuations, gold tends to retain its value over time, making it an attractive choice for individuals seeking to avoid the risks associated with more volatile investments.

Market Volatility and Gold Demand:

In times of heightened market volatility, gold often experiences increased demand. For instance, during periods of geopolitical instability or financial crises, investors flock to gold as a safe-haven asset, driving up its price.

As remittance recipients become more aware of these trends, they may increasingly view gold as a prudent way to manage their wealth and protect it from the risks posed by market fluctuations.

This could lead to an increase in remittance flows being directed toward gold investments, contributing to a stronger market for gold in countries receiving significant remittance inflows.

As economic uncertainties continue to shape the global market, remittances could increasingly flow into gold investments as individuals seek to preserve wealth and mitigate risk.

Gold's reputation as a safe-haven asset, particularly in times of volatility, positions it as a preferred choice for conservative investors looking for stability.

For remittance recipients, investing in gold could provide a valuable means of protecting their financial well-being while navigating the complexities of an unpredictable economic environment.

Analyzing Market Reactions to Political Changes: A Focus on Trump’s Election Impact

Donald Trump's election has had a significant impact on financial markets, both in the U.S. and globally.

His policy positions, particularly those focused on tax cuts, deregulation, and trade, tend to stir market volatility but also generate optimism among certain sectors.

These immediate effects are often reflected in global markets, including Vietnam's real estate, stock, and gold markets.

Stock Market:

Trump's policies, especially tax cuts and deregulation, have been seen as positive for businesses and equities in the short term, with stock markets often reacting positively.

This is especially true in the early days of his administration when investor sentiment was buoyed by expectations of a pro-business environment.

For Vietnamese investors, this has often meant increased foreign investments into emerging markets, including Vietnam, as the global appetite for higher-yield investments intensified.

However, volatility can also be triggered by Trump's stance on trade policies or international relations, which affects market stability.

Real Estate:

In Vietnam, the real estate market also reflects similar sentiments. On one hand, political and economic shifts in the U.S. could influence the flow of remittances, impacting domestic real estate investment.

If U.S. policy decisions result in stronger or weaker dollar performance, Vietnamese investors may see the value of their remittances fluctuate, potentially making real estate more or less attractive as a safe investment.

In addition, positive economic growth driven by Trump's policies could fuel higher demand for properties in emerging markets like Vietnam, especially in the luxury and middle-income housing segments, often favored by overseas Vietnamese.

Gold Market:

The gold market has been notably volatile due to Trump's foreign policy stances and global geopolitical uncertainty.

During periods of tension or political instability—such as trade wars, military escalations, or economic sanctions—gold often sees a spike in demand as investors seek a safe haven.

In Vietnam, this results in heightened interest in gold as a protective investment, with many remittance recipients, particularly those in more conservative financial demographics, moving funds into gold to hedge against inflation or currency risks.

Possible Long-term Effects:

Political Shifts and Remittance Channels in 2025

As political shifts continue to unfold globally, particularly in the U.S. under Donald Trump or future leadership, their influence on global financial markets and remittance channels will evolve.

Influence on Remittance Flows:

Political events, such as changes in U.S. foreign policy, trade agreements, or fiscal stimulus, could significantly impact the flow of remittances to countries like Vietnam.

For instance, if Trump’s policies or those of his successors lead to a favorable exchange rate for the Vietnamese đồng, remittance flows could increase as overseas Vietnamese would find their dollar-based earnings more valuable.

Conversely, if economic uncertainty or trade conflicts lead to a weaker dollar, remittance inflows could slow, affecting households that rely heavily on these funds.

Regulatory Adaptations in Response to Remittance Flows:

In response to shifts in global political dynamics, Vietnam may need to adapt its regulations surrounding remittances to ensure that the inflows remain efficient, secure, and beneficial for its economy. Regulatory changes could include:

• Increased Oversight and Streamlined Channels:

The Vietnamese government may introduce measures to ensure that remittances flow through formal channels (e.g., through banks and e-wallets) to protect both the sender and receiver.

Regulations could focus on minimizing fraud or facilitating easier transfer methods to make remittance processes smoother and more transparent.

• Taxation or Investment Incentives:

To capitalize on the growing remittance flows, Vietnam could offer tax incentives for investors who convert remittance funds into local investments, such as real estate or stocks.

On the flip side, adjustments to taxation on remittances may become necessary if the volume of remittances grows significantly, to ensure that these funds contribute positively to the national economy.

• E-Wallet Integration:

With the rising adoption of digital payments, remittances may increasingly flow through e-wallets.

The government may establish clearer guidelines or partnerships with e-wallet platforms like MoMo, ZaloPay, and VNPay, enhancing financial inclusion and ensuring that the rise of digital payments complements traditional financial systems.

Impact of Global Political Events on Remittance Trends: Continuing global political shifts—such as U.S.-China trade relations, regional security concerns, and evolving foreign policies—will influence the flow of remittances in the years leading up to 2025.

For example, if Trump’s policies continue to focus on reducing U.S. trade deficits or maintaining tariffs on goods from emerging markets, it could weaken economic growth in these regions, potentially leading to a reduction in remittance flows as incomes from overseas employment decline.

On the other hand, political stability or economic prosperity driven by favorable trade relations or fiscal policies could boost the capacity of Vietnamese workers abroad to send money home, further strengthening the role of remittances in Vietnam's economy.

Conclusion Regarding Potential Investment Channels for Remittances to Vietnam in 2025

The interplay between U.S. political shifts and investment sentiment in Vietnam is multifaceted, especially in sectors such as real estate, stocks, and gold.

As global political dynamics continue to evolve, particularly in the aftermath of elections like Trump’s, both short-term and long-term impacts on remittance channels can be expected.

It is crucial for Vietnam to adapt its regulatory environment to harness the growing potential of remittance inflows, leveraging this capital for broader economic development while ensuring that the channels remain secure, transparent, and efficient for investors.

This article was curated and authored by FinFan's market research and development team, alongside our marketing department.

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