Are properties in Vietnam realistically priced? Analysts are uncertain, but are sure the market is still far cheaper than neighboring cities.
At a housing conference, the market’s appeal to overseas investment was a hot topic. There was broad consensus that overseas Vietnamese (Viet Kieu) would be attracted to their country of origin, but less agreement was found on the other new sector of the market: non-Vietnamese foreigners, particularly those that live here and rent currently.
Gateway Thao Dien – Hot and luxury apartment in District 2
Recently conducted research didn’t offer any knockout news for those on the fence, but did confirm that prices are far lower than other regional hubs like Bangkok and Kuala Lumpur.
Much cheaper
In fact, the comparison with neighboring countries was stark.
A ‘standard’, non-luxury apartment in Ho Chi Minh City can start at around $30,000, while similar units in Bangkok, Hong Kong and Manila go at around ten times that rate with median prices at around $300,000.
A cross-section of comparable properties also came out in Ho Chi Minh City’s favor:
In every category, ticket prices in HCMC were considerably lower than counterparts in Bangkok, Jakarta and Manila, ASEAN competitors for foreign investment dollars.
Price and affordability
At the ‘luxury’ end of the scale, average prices again come way under other regional metropoles.
CBRE specializes in research on property worldwide. A recent report of theirs shows that the average price of luxury apartment in HCMC around $1781 per square meter, (around $178000/unit at 100sqm). Similar apartments in Singapore, Shanghai or Malaysia it cost around $500,000 to $600,000.
Whether these substantially cheaper prices will rise over the next 5-10 years, thus offering greater value to speculators, is questionable – as is any declaration that low prices equate to high value.
What is insightful however is Vietnam’s position in the affordability index. It suggests that there is scope for locals to invest in first or upgraded homes with a greater degree of ease than some neighboring countries, with average incomes rising and capacity at a favorable level for buyers.
Surveys by market-leading agents like Savills received mixed responses when seeking opinions about current prices. It came to no conclusion about whether the overall perception that costs were ‘cheap’ or ‘expensive’, but did find common optimism that the market will favor early investment in the first months following permitted foreigner purchases. “The market is still emerging, still taking shape – but all the indicators are that Vietnam’s appeal to foreign businesspeople, investors and professionals will increase substantially over the next decade.” Said Mr. Troy Griffiths, CEO of Savills Vietnam.
The highest-end offerings in the market represent the biggest bargain – and the biggest opportunities for growth, say some leading experts. Mr. Peter Ryder, “The luxury segment retains very high potency. Prices are incredibly good in comparison with other cities, averaging around $2900/sqm here in Saigon versus $20,000/sqm in the top-line Bangkok and KL equivalents.”
What do you think? Got any thoughts on property prospects to share? Leave a comment below or get in touch for any questions or feedback on the Vietnam property market
VietApartment NEWS
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[HOT] Project Estella Heights Apartment in District 2 will be opened to sell second stage in this September after a successful first stage.
Register now to have reservation and visit showroom! Thank you!
