With the prices of Hong Kong and Mainland China properties increasing, investors are now looking towards overseas properties like Vietnam for more affordable investments.
Because of this, Vietnam is quickly becoming ASEAN’s hottest property market for investors from Mainland China and Hong Kong.
Thanks to a booming economy and supportive government policies, the Housing Law and the Law on Real Estate Business (which took effect in 2015) allows overseas Vietnamese and foreigners to legally own, sell and transfer real estate. Anyone with a 3-month tourist or residence visa may now own land on a 50-year lease which is renewable. Foreign companies can also easily buy property. Therefore property value in Vietnam has been going up rapidly, especially in Ho Chi Minh City and Hanoi.
In Q3 2016, the total sales for dwellings in Ho Chi Minh City went up by 49% from the previous quarter, and by 193% from the Q3 2015.
In Hanoi, the country’s primary market apartment prices rose by 8% during Q3 2016, and its secondary market apartment prices rose 5.3% y-o-y and its Premium segment had the highest q-o-q price growth of 3.6% in that same quarter.
There are also a series of plans for major infrastructure improvements underway.
Ho Chi Minh City’s first metro line is scheduled to be ready by 2020. Hanoi’s first line is scheduled to be ready by 2018.
Ho Chi Minh City’s Real Estate Association has said that 700 foreigners bought property in the city between July 2015 and Q1 2016.
Kingston Lai, founder and chief executive of Asia Bankers Club, has said that more investors are setting their sights on the fast-developing Southeast Asian economy.
At this time, the price for top-end properties in central Ho Chi Minh ranges between US$3,000 to US$5,000 per square metre. This price is well below Bangkok’s where the same type of property can cost up to US$7,000 to US$9,000 per square metre.
Vietnam is one of the fastest growing countries in the world. Its economy expanded by over 6% in 2016 – and current trends are pointing upward for business and foreign investment. In Vietnam, the annual rental yield for some high-end apartments in major cities are currently at 7 to 8 per cent. This is 1.5 to 2.5 per cent higher than the same type of apartments in Hong Kong, Bangkok and Singapore.
Also, prices are still rising fast.
Data shows that in Q1 2017, new Ho Chi Minh City apartment prices grew 6.9 per cent. In Hanoi they grew by 7.3%.
Statistics have also shown there will be an 8 to 10 per cent growth in the value of residential properties in Vietnam’s major cities in 2017.
All in all, Vietnam seems to be a great opportunity for property investors. However, analysts have stated that investors should be fully aware of the risks and perform complete due diligence before entering this emerging market.