With its stable economic growth during recent years, Vietnam is becoming one of the fastest-growing markets in Southeast Asia as well as one of the best economies to register your business in. Especially, Vietnam is lining itself up to be the prime hot spot for property investment in the ASEAN region. Many attractive benefits are available for investors who buy property in Vietnam right now.
Vietnam real estate market – a sustainable investment
New legal framework for foreigner to buy Vietnam property
Legislatively, the revision of Vietnam’s laws now allows eligible foreign buyers to buy and own residential property. Consequently, there has been an increase in the types of projects available to foreign buyers such as apartments, villas, townhouses…It is a new point of the law when such property can be leased out, traded, inherited and collateralized. It also firmly places the rights of foreigners over the property on the same level as locals. According to the Ho Chi Minh City Real Estate Association, since the new laws were put into effect, more than 1,000 transactions from foreign buyers were registered for Ho Chi Minh City (HCMC) properties. In the past, there were only 250 foreigners buying between the period of 2009 to 2013 for the whole Vietnam.
A young and growing population
Demographically, Vietnam’s favorable situation paints a rosy outlook for the real estate market. It has a median age of 30 and a rapidly growing middle-class forecasted to reach 40 million people by the year 2020. Besides, the urbanization rate is significantly high, about 3.5 percent per annum. This ideal demography has created a huge demand for quality housing in the urban centers. It has pushed the rapid growth of housing segment, particularly in mid-end and affordable condominium. In 2015, housing segment for middle class accounted for more than 30% of the transaction in the country. A remarkable example is Vincity developed by Vingroup, which fully converts value, including modern, quality, synchronization and utility.
Strong, consistent economic growth
Economically, the strong growth of Vietnam economy has recently led to a sharp increase in GDP, jobs and wages and greatly improved its standard of living. The demand for quality housing, office space and retail segment has accelerated. That creates a more vibrant and sustainable real estate industry. In reality, there is a shortage of large office space and limited Grade A office buildings in HCMC. Therefore, lots of projects have been invested and developed such as Deutsches Haus, The One, Saigon Centre…
When income increases, people tend to have more need in shopping and entertainment. This tendency facilitates for the development of the retail segment. The number of shopping malls in 2015 has increased 12 times more than 2007 in Ho Chi Minh City and increased by 19% compared the previous year in Hanoi. For example, Thai companies purchasing the Vietnam operations of Metro and Big C. Korea’s Lotte and Japan’s Aeon also continue to expand their retail networks in the country.
Besides, economic growth and competitive labor cost have attracted a huge amount of FDI to develop industrial sector. Compared to India and China, Vietnam has the advantages of low cost, low wages, improving English-language skills and technical proficiency . For examples, industrial land in Vietnam is cheaper than in China. And wages are about a third lower than in China’s industrial coastal regions. Moreover, Vietnam’s young population with deep and increasing talent pool also completely meet the requirements of the open market.
High demand for industrial properties
Thanks to these advantages, Vietnam is more attractive in terms of IT outsourcing, Fast Moving Consumer Goods…. Therefore, many companies want to set up their branches and offices in the country. This has led to high demand for warehouses, factories and industrial land from foreign investors. The demand also explains why investors invest more in industrial parks for factories or lease to get an enormous profit. Some notable examples are large factories of Samsung in Thai Nguyen, Bac Ninh and Saigon, or Amata, the high-tech industrial park in Dong Nai,…
A bright future for Vietnam property market
Vietnam property market is becoming the region’s hottest market with a bright future in the eyes of the investors. Marc Townsend, country head of CBRE Vietnam said that in the next 10-15 years, Vietnam property market would still grow well, even better than before. Young population, burgeoning middle class, huge FDI to real, deep economic, integration…will help the property market to grow stably. Another expert, Sigrid Zialcita, managing director of Asia Pacific Research at Cushman & Wakefield also believed that there would be many opportunities in the next 15 years as urbanization produces more affluent Vietnamese investors.