Vietnam new hotspot for luxury property

Vietnam New Hotspot For Luxury PropertyVietnam has become a new preferred location for luxury property buyers, whether domestic or foreign, due to the country’s impressive economic growth and easier legislation to own real estate. Premium condominiums in numerous new developments in Ho Chi Minh City and Hanoi, as well as in the beach towns in between such as Nha Trang and Danang, as well on the resort island of Phu Quoc, are appealing for buyers due to their comparably low square meter prices but high quality and mostly top location.

Apart from that, it is also the rental and appreciation potential. Rental yields have been at an average of 5.8 per cent in Ho Chi Minh City and at 7.5 per cent in Hanoi last year, according to real estate consultancy Savills. Danang comes next in terms of solid yields, living standards and future property prospects. Values should continue to rise over the next decade as new modern mass transit systems in Hanoi and Ho Chi Minh City and new airports in Phu Quoc and Danang are going to be completed.

Prices for luxury condominiums in Ho Chi Minh City climbed 17 per cent in 2018 to an average of $5,518 per square meter, according to CBRE Group. The property firm forecasts they are likely to climb nearly ten percent by early 2020 to $6,000 per square meter. More affordable condos in the city only increased one per cent last year.

While demand from overseas investors remains strong, the latest wave of buyers are Vietnamese who made their wealth from the booming economic conditions. The number of people with net assets of $30 million or more increased by 320 per cent between 2006 and 2016. This was the fastest pace globally ahead of India and China, according to a 2017 wealth report by Knight Frank.

For international buyers, a change in foreign ownership legislation in 2015 enabled them to acquire a long-term lease and buy property in Vietnam more easily. Now, foreigners are allowed to buy for a renewable term of 50 years, and for reasons other than personal use. In addition, developers can sell up to 30 per cent of units in a condominium building and ten per cent of landed property in a residential compound to foreigners. Before, the allowance was a single unit.

However, certain regulations on foreign ownership, particularly when it comes to reselling property, are still unclear and need attention before any commitment is made by buyers.

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Vietnam has become a new preferred location for luxury property buyers, whether domestic or foreign, due to the country’s impressive economic growth and easier legislation to own real estate. Premium condominiums in numerous new developments in Ho Chi Minh City and Hanoi, as well as in the beach towns in between such as Nha Trang and Danang, as well on the resort island of Phu Quoc, are appealing for buyers due to their comparably low square meter prices but high quality and mostly top location. Apart from that, it is also the rental and appreciation potential. Rental yields have been...

Vietnam New Hotspot For Luxury PropertyVietnam has become a new preferred location for luxury property buyers, whether domestic or foreign, due to the country’s impressive economic growth and easier legislation to own real estate. Premium condominiums in numerous new developments in Ho Chi Minh City and Hanoi, as well as in the beach towns in between such as Nha Trang and Danang, as well on the resort island of Phu Quoc, are appealing for buyers due to their comparably low square meter prices but high quality and mostly top location.

Apart from that, it is also the rental and appreciation potential. Rental yields have been at an average of 5.8 per cent in Ho Chi Minh City and at 7.5 per cent in Hanoi last year, according to real estate consultancy Savills. Danang comes next in terms of solid yields, living standards and future property prospects. Values should continue to rise over the next decade as new modern mass transit systems in Hanoi and Ho Chi Minh City and new airports in Phu Quoc and Danang are going to be completed.

Prices for luxury condominiums in Ho Chi Minh City climbed 17 per cent in 2018 to an average of $5,518 per square meter, according to CBRE Group. The property firm forecasts they are likely to climb nearly ten percent by early 2020 to $6,000 per square meter. More affordable condos in the city only increased one per cent last year.

While demand from overseas investors remains strong, the latest wave of buyers are Vietnamese who made their wealth from the booming economic conditions. The number of people with net assets of $30 million or more increased by 320 per cent between 2006 and 2016. This was the fastest pace globally ahead of India and China, according to a 2017 wealth report by Knight Frank.

For international buyers, a change in foreign ownership legislation in 2015 enabled them to acquire a long-term lease and buy property in Vietnam more easily. Now, foreigners are allowed to buy for a renewable term of 50 years, and for reasons other than personal use. In addition, developers can sell up to 30 per cent of units in a condominium building and ten per cent of landed property in a residential compound to foreigners. Before, the allowance was a single unit.

However, certain regulations on foreign ownership, particularly when it comes to reselling property, are still unclear and need attention before any commitment is made by buyers.

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