Vietnam’s property market is now officially open to all foreign residents and investors. Here’s what you need to know to get you started.
Saigon Center at Tet holiday
As of July 1st 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 1st 2015, property is now available to:
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:
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.
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:
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.
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.