Overseas investment in Vietnam is on the rise, attracted by newly opened markets and a growing economy.  Property values are expected to be the latest beneficiary, with foreigners now able to buy legally.  One expert, however, is urging patience and caution to new entrants in this emerging market.

Ngo Dinh Han is a lecturer at Ho Chi Minh City’s University of Economics.  He expects foreigners to reap the benefits of legislation introduced on July 1^st, allowing them for the first time to own property in Vietnam.  He reminds would-be buyers to be aware of these 7 common errors when taking their first steps on Vietnam’s property ladder.

Riverside Vinhomes Central Park Project of Vingroup developer

1. Don’t follow the crowd

The projects with the most hype are not necessarily the best investments.  Some unscrupulous agents have ploys to simulate high interest and attract those looking for quick wins.  Don’t be fooled by promises of quick profits – do your homework. 

“Look beyond headline figures to the developer’s track record in timely delivery.  Check and double check the payment schedule and conditions.  Don’t sign anything you don’t understand – get an agent or legal expert to translate every document if you don’t speak Vietnamese.  Some, like Vinhomes Central Park, offer everything in English, which is great – but check, and check again before making any commitment.”

2. Avoid early-stage peaks

The last round of ‘early bird’ offers before completion are designed to prompt impulse buys – but are often the least profitable in the short-term.

“This is the highest price before general release, and, with over-capacity issues prevalent at the minute, is something to avoid.  You may well see a return in the long-run, but its unlikely prices in the first 12 months will match those final totals offered in the last cycle of development.”

Luxury Gateway Thao Dien Apartment in District 2

3. Look at value before prices

This advice is applicable in every market, but is perhaps more relevant here.  Some prices reflect the low appeal of a neighborhood or confidence in a developer, while other higher prices reflect surrounding development such as the new metro system.

“Always remember why you’re buying somewhere.  Profit is likely in a growing market – the only question is how long you want to wait.  Are you buying to live, or buying to let?  Are you looking at long-term growth or a short-term flip?  Make judgments based on your value strategy.”

4. Limit your leverage

With some uncertainty over the viability of long-term profits, be sure to bank on a conservative return rather than the maximum, and plan your borrowing around that to limit your exposure to market changes.

“There’s been a great deal of fluctuation in local interest rates, and these could eat up your profits if you’re not careful.  Look at properties where large-scale lending isn’t necessary.”

5. Wait and see

Unit prices are much lower than neighboring metropolises like Bangkok and Kuala Lumpur currently.  But the effect of the recent property laws have yet to be felt, and Ngo Dinh Han believes it may be a little while before a true picture of market values emerges.

“Getting in on a good development early is always preferable – but don’t go too soon.  Property speculation can feel like a gamble, so look at the whole board.  Observe the progress of promised infrastructure developments, population changes in your chosen area, and any new amenities opening up.  Transport, city-wide migration and services are the trinity of any property investment decision.  Take your time.”

6. Don’t bank on a quick flip

For all these reasons and more, speculators banking on fast turnaround at profit are likely to be disappointed.

“Emerging markets do offer enormous potential – but equally, enormous risks.  Patient, sensible investors with research in-hand who are not over-leveraged are likely to succeed.  Speculators looking for a fast profit are not, however.  Don’t go beyond your financial limits, and don’t gamble what you can’t afford to lose on the promise of a quick win.”

The Sun Avenue from Novaland – middle-income apartment in District 2

7. Vary your investments

Buyers on a larger scale should follow the ‘Buffet model’ in all areas, but in an emerging property market especially.

“Don’t risk it all in one sector or one area.  Diversify your interests across districts, cities, and property types.  The luxury end is most profitable right now – but will that remain the case in the long-term?  Hedge your bets, and look at middle-income apartments, houses, tourist villas and commercial property to keep you in the game until the end.”

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We offer regular updates on the Vietnamese property market, specializing in helping foreigners and Viet Kieu buy property in Ho Chi Minh City and beyond.  We offer regular market updates on these pages, so stay tuned for the latest news.  Get in touch with any questions about how you can invest in Vietnamese property, or with any issues you’d like to see covered in these pages.

VietApartment NEWS

VietKieu (a term meaning “Vietnamese sojourner”) from Western countries are being pulled back not by sentiment – but by promises of substantial returns.

Mrs. Hoang is one such VietKieu.  Living and working in the UK has helped her generate capital, but investment prospects in England remain minimal: “I decided to buy this villa because of savings interest of 1.5% per year in England is too low, even without additional taxes of 20%. While I buy villas in Vietnam and I am in commitment from developer the profitability of 8% in US Dollar, much better than”.

The Villa she bought in PhuocTinh, Baria-Vungtau Province has an ocean view, and at for $230.000 represents a fraction of the cost of a similar property in England.  Her investment is a direct result of the law change which came into force on July 1^st 2015.  The law now protects VietKieu enabling them to buy property in their own name, with a lower threshold of ‘proof’ required of Vietnamese heritage.

She is far from alone in responding quickly to the changes.

Oceanami villa resort project in Vungtau price from $175.000

A group of VietKieu based in Eastern Europe recently registered 7 sea-facing villas in Bai Dai, Phu Quoc.  “In Phu Quoc, many developers strongly commit to high returns thanks to growing demand and infrastructure development on the island”, said Mrs Thuong, who represented the group. “The new law made it even more attractive to us to get on board early.”

It’s not only seaside views that are attracting the VietKieu. City apartments – especially at the high end – are proving noteworthy to new buyers.

Mr. Trung, was born in Vietnam 40 years ago but has lived and worked abroad for 2 decades.  He recently bought a luxury apartment in the Goldview project, Ben Van Don St, Ho Chi Minh City, worths nearly 3 billion VND ($140.000).

He took his decision in July, attracted by the promises of high ROI. “I’m likely to make a profit in the longer term through value alone”, he said “but in the interim, I can still generate a 6% return through rental.  It’s very good deal”.

The Sun Avenue apartment, hot project of Novaland in District 2

Novaland, one of the bigger developers of Vietnam, released a report in 2015 claiming VietKieu accounted for 10% of all new sales, with contracts being exclusively pursued in the high-end luxury segment. The Phu My Hung Company meanwhile recorded more than 100 transactions from Vietnamese overseas, though figures may be even higher:

“Before this law change, VietKieu often bought in the name of a relative.  With the new real estate law extend for foreigners and Vietkieu, transactions under their name will significant raise in the near future”, said Mr. Truong Quoc Hung, adding: “Phu My Hung is a new part of Ho Chi Minh City, so we have a good idea of who has been living here.  We’ve recorded a number of nearly 30.000 residents and 50% of them are foreigner and VietKieu. The law change makes these numbers even more compelling.

It isn’t just Western money that VietKieus are bringing back.  Many emigrants based Hong Kong and South Korea have been buying up property at the City Gate projects on Vo Van Kiet, Ho Chi Minh City, at prices of  1 to 1.2 billion VND ($55.000), or 16 to 18 million per square meter.  The law change means at this project the current number of 20% VietKieu ownership already recorded could rise even more quickly in the near future.

Mr. Nguyen Xuan Loc, director of Techcomreal said: “There’s no doubt that the policy change from the Government has been hugely influential.  It solidifies the notion that foreigners bring profit just as much as native transactions, and has created many new customers, particularly in Villa Resorts, Luxury apartments and offices, particularly in Districts 2, 7 and 9.”

The common feature of this type of asset is the ability of creating return (rental and residential). Mr. Loc said that there are three reasons for Vietkieu to come back to mother country and buy property this time.

The first one is the local attractiveness of real estate in Vietnam, which is in the post-crisis phase and has just entered a new stage of recovery. Currently, the market is growing with a young population and excellent economic prospects, meaning in financial terms, it’s a good place to put their money.

The second reason is the reassurance from the government regarding the legality of their ownership.  It makes the market more transparent, meaning a greater level of clarity regarding overall market prospects.

Estella Heights of Keppel Land Singapore

The last, but not least is timing: the legislation coincides with the arrival of newly successful entrepreneurs returning home from United States, Eastern Europe and some Asian countries. Many young Vietkieu investors are coming to Vietnam and invest in good location apartment and luxury apartment purely as an asset for a return. The previous generation are buying in resorts to make new homes on their return to the motherland.

Not even 2 months have passed on the enactment of the new law, and much significant data is yet to filter through, but things are already looking very positive.

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Compiled from VnExpress
VietApartment NEWS

Saigon Center at Tet holiday

As of July 1^st 2015, foreigners with valid Visas can now buy a house, apartment or building anywhere in Vietnam.  This is the first time property has been made available to foreigners without family ties to Vietnamese nationals.

Though there is broad availability, some limitation on supply exists: in each ward (or Phuong) 250 houses, and 30% of apartment blocks are available to foreigners.  New developments are being built to increase capacity and cater to foreign tastes and standards, and prospects for growth – thanks to pro business legislation and infrastructure investment – are excellent.

Who can buy:

Previously, only blood relatives of Vietnamese nationals and foreigners married to locals were permitted to buy property here.  As of July 1^st 2015, property is now available to:

• Foreign nationals with a valid Vietnamese visa of one day or more.
• Foreign investors and companies registered in Vietnam
• Viet Kieu: people of Vietnamese birth or descent resident abroad.

What are the conditions?

The Vietnamese constitution states that all land is owned by the state.  The property on that land is purchasable, however.  The terms will initially be for up to 50 years, with an extension of 50 years thereafter.  Rights of sale after expiration of the term are guaranteed on a free-market basis, meaning equity can be retained.

About the Vietnamese property market

The market has a strong cost to growth potential ratio, given the stability of the Government and its commitment to attracting foreign investment, particularly in comparison with saturated and politically uncertain neighbors like Thailand and Malaysia.

Though there has been a slowdown, growth – unlike in many Western countries post-2008 – has continued.  The economy, driven by manufacturing and exports, grew at a rate of 5.98% GDP, with growth of 13.6% expected by 2025.

What parts of Vietnam are attractive to foreigners?

Foreign attention is focused on areas rich in commercial possibility:

• Ho Chi Minh City, commercial and investment capital of Vietnam
• Hanoi, seat of government and cultural center
• Nha Trang and other coastal regions popular with foreigners (Russians in particular) and local tourists
• Phu Quoc, an island primed for vast commercial and tourism investment
  
  

  Ho Chi Minh City overview                      

How much is a typical property?

Prices are competitive but vary according to type, style and location:

Homes and villas:

Typical 3-bed family homes come in at

• Ho Chi Minh City: $50,000 to $250,000
• Nha Trang: $50,000 to $ 100,000
• Hanoi: $100,000 to $300,000

Around $1.000.000 to $1.500.000 buys a luxury, 5-bed property.

Apartments

A Western-style apartment with 3 bedrooms in a new, purpose-built development starts at Ho Chi Minh City: $50,000, rising to $150,000.  Other units consider luxury apartments begin at $250,000.

Beautiful riverside Saigon Pearl apartment price from $100.000

How does this compare with neighbors?

Neighboring countries are seeing lower growth prospects and overheated real estate markets.  Other ASEAN governments are seeking to limit rather than encourage foreign ownership.

In Bangkok, prices can start at around $1million for a condominium, while at the lower end foreigners are required to invest a minimum $250,000.  Investors have seen a yield of as little as 5% as the Thai economy suffers a prolonged period of low growth.

In Kuala Lumpur, a similar minimum of $250,000 is required for foreigners to invest in the market, while in Indonesia there are substantial hurdles for any foreigner to buy property.

What else should an investor know?

There is a genuine upward curve to Vietnamese investment prospects, with international agreements and accompanying infrastructure development looking to boost property values substantially over the next decade.

The Trans-Pacific Partnership (TPP) will soon come into force, and Vietnam is expected to benefit most from membership of the world’s largest trading bloc. Closer to home, South-East Asian economic ties will be solidified and enhanced by membership of the ASEAN Economic Community (AEC), raising prospects and standards still further.

Vietnam is preparing the way for greater investment and collaborations through infrastructure and developments, such as:

• A brand new Metro system in Ho Chi Minh City, which is expected to have a dramatic impact on property values;
• New international airports, catering for expected increases in tourist numbers;
• New highways and inter-city railways.

While the future looks bright, Vietnam remains a developing country, and the potential for growth reflects the fact that the landscape is far from perfect.  Corruption and bureaucracy – long felt to be Vietnam’s greatest hindrance – are being acknowledged and challenged as a priority as the country seeks to integrate still further with the international community.  Uncertainty over future legislation is tempered by recognition that Vietnam has one of the most stable governing regimes in Asia, benefiting growth prospects.

Benthanh Market, symbol of development in Saigon

Overall however, the picture is very positive.  In addition to the positive economic forecasts, Vietnamese people welcome foreigners to one of the most optimistic nations in the world, a nation with high literacy, improving education and knowledge of English and strong work ethic.

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Stay tuned to this blog for further updates on the market.  If you have any question or need advice requirements about property Vietnam, please contact us.

VietApartment NEWS

According to the Management Board of HCMC Urban Railway, the project  of construction monorail train Number 2 (District 8 – Binh Thanh) stretches over 27 km with a total capital estimated 15 015 billions VND. Depot (maintenance station) of this monorail train will be built in Phong Phu Commune, Binh Chanh District, with an area of about 8 hectares.

Metro system No.1 Ben Thanh-Suoi Tien will be completed in 2017

 Monorail No.2 starts from Nguyen Van Linh road intersection – Highway 1 – Highway 50 and goes along Nguyen Van Linh – Huynh Tan Phat over the Saigon River – North-South of Thu Thiem Road – Thu Thiem new urban area – Tran Nao – Xuan Thuy – over Saigon River – urban area in Binh Quoi – Thanh Da. Orientation will connect with the 3A metro (Ben Thanh – Tan Kien).

This monorail train is expected to attract many passengers because of being passing a series of populated areas in District 2, District 7, Binh Thanh where is Vinhomes Central Park project in and Binh Chanh District. Currently the project is calling for investment from the BOT (build – operate – transfer) capital and PPP (public – private partners) capital.

As planned transport development project and vision approved by Prime Minister till 2020, HCM City will have 8 metros (subway), 6-line BRT (bus rapid transit) and 3 routes: tramway (tram) and monorail train (one ray train).

Thus, the first tramway line is almost 13 km long (Ba Son – Ton Duc Thang – Me Linh Square – Vo Van Kiet – Ly Chieu Hoang – Western Bus Station). This tramway is Oriented to extend to Thanh Da urban area (Binh Thanh District); The metro number 2 has over 27 km length (district 8 – District 2 – Binh Thanh district) and monorail train number 3 is about 16.5 km (crossroads Phan Van Tri – Nguyen Oanh) – Phan Van Tri – Quang Trung – Quang Trung Software Park – To Ky – Tan Chanh Hiep station).

Monorail has higher speed than metrorail and monorail costs less than metrorail.

Monorail trains have appeared in many major cities around the world and is estimated to have the advantage of being much cheaper than the high railway and underground railway and transport capacity. Construction period is also shorter and less impact on the surrounding traffic. In addition, this type of transport takes less space as small monorail pillar and far space.
This information shows us the determinated action from government to develop infrastucture of Ho Chi Minh City and value of property that foreigners will buy after new law applied form the 1st of July.

Compiled by VietApartment NEWS

Literatured from VnExpress

Not too far from the center, be a international area where many international schools, offices and many foreigners live in, Thao Dien is the first place you should thing first to live and to work. See the future of Thao Dien area, the future of the fact that many foreigners come and live and work, especially after some gorvenment policy is approved, Novaland developer set their decision to build Tropic Garden apartment and up to now, most of apartment in Tropic Garden apartment is sold out. At the present, you will have some way to buy in secondary market or from some investors.

We introduce you structure of Tropic Garden apartment in District 2, hope you find some thing special before any decision to buy or to rent to live.

River view from height of 14 floor on Tropic Garden tower

5 towers of Tropic Garden Apartment

Typical flat structure of 14-25 floor and in detail of Tropic Garden Apartment
Flat structure of A1 & A2 Tropic Garden Apartment

Flat structure of duplex 1 Tropic Garden Apartment

Flat structure of duplex 2 Tropic Garden Apartment
READ MORE>>

VietApartment NEWS

In the 8th of July, Savills reports that 5.000 apartments in the market have been consumed, a highest record from the last quarter of 2010. The number of apartments sold in District 2 equals 28% and Binh Thanh District equals 15% of the total number Saigon market. And this number from Savills is not fit with reports from CBRE just after it few days, 10.000 apartments while the target objects of survey compaign are the same in 80 to 100 projects with 19 new projects opened to sell. That conflict in the number from these reports need to be explained by the head of 2 international company.

Vinhomes Central Park from Vingroup developer & investor

On behaft of CBRE, Mrs. Le Hoang Lan Nhu Ngoc, head of reserching and developing market department, stated that the number of 10.000 is the true number of the market with maximum error about 5%. The source of apartment sold are from the number of transactions in every project CBRE represent and sell, real estate agents and investors and developers then compare to each others. If calculated just in 19 new projects opened to sell, apartments are sold reach up to 5.000 already.

On the other side, Mrs. Nguyen Thi Van Khanh, head of consulting department of Savills, stated that number of 5.000 apartment sold is the number calculated in April, May and June and that number is certified by the developing network, real estate agent and developers. The error maximum with this report is just from 3% to 5%. In addition, she stated that number not including the number of customers keep the contract before deposit and the number of apartment in wholesale market for the number in this case has been come to final selling contract.

Mr. Nguyen Van Dung, price president from Dat Lanh group, give his own idea that:” I don’t believe that foreign companys can have a report with error just in 3% to 5%. In this unclear market, who has made is up to 20% is the experts”. He advice investor that you should not rely on the number of that report totally. At the present, there are many tricks and way to give to the market the illusion number. The seller can re-deposit to keep position or one product that has been deposited still continuing to be sold in other system are two reasons that the market is unclear and the error from this report should go higher.

Up to now, Vietnam has no standard system register all the transaction of the market so the total number of apartment sold is very hard to determine. That’s why the different between two company is normal but the number of 5.000 is not a healthy sign of the market.

This error will imparts directly to all the people who set the strategy for development, project developers and secondary investors and most of foreigners who could buy from the 1st of July. They may come to a wrong decision and receive a minus investment.
It is the time for Vietnam to imitate Thailand or Singapore to set up a transaction system for the sustanable of the market and prevent the corruption in the near future!

VietApartment NEWS

Literatured from VnExpress

Firstly, The Krista apartment of Capitaland investor have very interesting pricing rate, about $1.130 in comparison with $2.500 but you will handle it for completed condition. You will waste your time and money to decorate then resell or renting out or come to live.

Secondly, you will have the same external services in surrouding area with Sala Sarimi apartment. From The Krista apartment of Capitaland, just go ahead and 5 minutes you can get Saigon Business Center.

Thirdly, your distance to Long Thanh international airport, a new airport has just been approved from government, is shorter and anyone want to flight over sea have to go to Long Thanh international terminal, that means have to go through The Krista apartment in District 2.

Forthly, you can easily get to new financial center of Ho Chi Minh City (Saigon), just in few minutes.

With all of what we listed above, we suggest you some way to own an apartment in Krista apartment with small budget. Especially, after the application new law for foreigner to buy property in Vietnam or VietKieu can own property like Vietnamese on 1st of July, 2015, the gate is opened up and it is depend on your speed to caught oppotunity to own valuable in such a golden area of new Saigon City.

Here are the pricing and attractive payment. Just see and find out that you don’t have to pay big money at once. You do it gradually and go to the supportive bank. They will help you with very interesting rate. That is the way many investor, both native and foreigner buy, own and get money from this way. How about you?

Selling price is not yet include VAT and maintenance over using area.
Basic payment of The Krista apartment

Discount 3% in quick payment of The Krista apartment (not included VAT)

Financial support from the bank up to 70% value of apartment:
– VIETINBANK.
– MB BANK
– STANDARD CHARTERED BANK
– HONG LEONG BANK

READ  MORE>>

VietApartment NEWS