Is Ho Chi Minh City the next Beijing or Shanghai? Vietnam ranks high on Juwai’s top 10 countries to invest – so should you buy up luxury property quick?
Want the Nguyens as neighbours? Interest is building fast in Vietnam’s luxury property market – with beautiful beaches, amazing food, a thriving economy and competitive pricing, it’s no wonder that the coastal county is Asia’s biggest property investment hotspot
A thriving national economy coupled with low market entry prices makes for a compelling proposition, and after the game-changing amended Law on Residential Housing opened the door to opportunity in 2015, Vietnam began making headlines as the new property investment hotspot in Asia.
The relaxed rules enabled foreigners to buy up to 30 per cent of the units in each new residential project, a quota which Kenny Law, of Savills Hong Kong, says was quickly filled by investors from Hong Kong, South Korea and mainland China. “Wealthy overseas Vietnamese represent another enthusiastic group of investors,” he said.
Such has been Chinese buyer enthusiasm that, from virtual obscurity in 2015, Vietnam now consistently ranks on Juwai IQI's 10 most popular countries list.
Georg Chmiel, Juwai IQI executive chairman, says Chinese investors see in Vietnam's cities the next Shanghai or Beijing.
“With Vietnam's economic and demographic outlook, they fully expect prices to climb significantly in the years to come, while remaining safely decoupled from real estate price trends in China itself,” he said.
Chmiel added that in the past two years Chinese investors have shown an increasing preference for real estate in Asean markets; from their perspective, “Vietnam has it all”.
As Juwai IQI points out in a Vietnam market research report, condo prices there are tantalisingly affordable. It found that a high-end property in central Ho Chi Minh City costs US$3,000-6,000 per square metre while its equivalent in Bangkok costs around US$7,000-9,000 (HK$54,257-69,760), while in Hanoi and other coastal cities, “properties are even cheaper”, starting from US$109,800 for a semi-luxury home.
Yet in an ensuing construction boom, which saw mini cities arise across the country, not all developments were created equal. Stories emerged of “ghost” villas being sold but never completed, or projects built without the proper permits, or investment properties that failed to deliver the promised returns, especially in the burgeoning “condotel” sector, where units are individually owned but operate as a commercial hotel, which until February didn't even give owners the certainty of a title.