International Property

Sunwah Group tempts Hong Kong buyers with Ho Chi Minh City property project

A majority of investors in the Vietnamese city are from Hong Kong, Taiwan and mainland China where real estate prices have doubled in the last 10 years

PUBLISHED : Tuesday, 31 October, 2017, 3:14pm
UPDATED : Tuesday, 31 October, 2017, 8:08pm

Investors from Hong Kong, the top buyers of property in Ho Chi Minh City where home prices have doubled in less than 10 years, got first preference on a new tower in the Vietnamese city.

Sunwah Group, a Hong Kong developer with a heavy focus on Vietnam, launched the sale of the third tower of its Sunwah Pearl project this month, giving buyers from the city dibs on 140 units priced between US$2,300 and US$2,600 per square metre. The aggregate prices of most two-bedroom and three-bedroom units range between US$250,000 and US$400,000. The entire project has a total of 1,342 units.

Tram Cao, a sales executive at Sunwah Pearl, said the project is a five-minute drive from the city’s central business district.

“About 30 per cent of our buyers are foreigners,” Cao said. “Chinese buyers rank first, followed by Japanese buyers.”

Vietnam is fast becoming the Asia’s hottest property market for Hong Kong and mainland Chinese investors, as prices continue to go through the roof after the country opened up its property market to foreign investors in 2015. Developers can now sell 30 per cent of units in each building to foreigners.

The Ho Chi Minh City Real Estate Association estimates 700 foreigners bought property in the city from July 2015 to the end of the first quarter of last year, and the market has heated up considerably.

In Ho Chi Minh City, new flat prices grew 6.9 per cent in the first quarter of 2017, and 7.3 per cent in Hanoi, Jones Lang LaSalle data shows.

Sunwah Group’s presence in Ho Chi Minh City has gained prominence since it developed Saigon Pearl, which is attached to the new Sunwah Pearl, about 10 years ago. Cao said the per square metre price then was only about US$1,000.

Josephine Yen Nguyen, international residential sales consultant at Savills in Ho Chi Minh City, said home prices are increasing by as much as 25 per cent every year in the central business district in District 1.

“So far there are only two residential developments in District 1[in addition to Sunwah Pearl] for sale: Vinhomes Golden River and Madison,” she said. “Madison is completely sold out. Vinhomes Golden River only has two towers with remaining quotas for foreigners.

“Both Madison and Vinhomes Golden River are priced from US$5,000 to US$6,000 per square metre.”

She said Hong Kong buyers are particularly fond of Sunwah Pearl as it is 95 per cent owned by the Hong Kong developer. She personally sold two units to two clients in Hong Kong although both clients have not visited the property before.

“I’d say about 60 per cent of foreign buyers are from Hong Kong, Taiwan and mainland China, with Hong Kong buyers accounting for the majority of them,” she said.

She said because the Australian government has issued tougher regulations over its property market, Chinese buyers were shifting their investment focus to Southeast Asian countries.

A series of major infrastructure improvements are under way in Ho Chi Minh City, which serve to justify the soaring property values in the city. The first line of Ho Chi Minh City’s metro is scheduled for completion by 2020.

“I think some speculation over oversupply is scaring away some investors,” Yen said. “But I don’t think that is true. There are only 10 projects along the first line of metro.”