Q1 There has been a lot of hype about an influx of foreigners going to buy properties in Vietnam since the liberalisation of its market to foreigners in July last year.
- Seven months on, how’s the situation? Have many of the implementation hiccups been resolved?
- Can you also suggest some areas in HCMC that would be ideal for a 55-year-old retiree like me – somewhere quiet, not too far from the city centre yet with all modern amenities. I would also prefer a non-Vietnamese developer; joint ventures are okay. My budget is about USD1 million.
- And finally, can I unofficially rent out a room in the 3-bedroom unit that I am thinking of?
1) A few months since the change in Vietnam’s Housing Law on 1st July 2015 allowing foreigners to purchase properties in Vietnam, foreign interest has noticeably gained momentum. According to Thanh Nien News (a prominent local newspaper): “Foreigners are welcoming the new law with more than 400 transactions from foreign buyers registered since July, while only 126 foreigners bought between 2009 and 2013.”
With the recent conclusion of the Trans Pacific Partnership (TPP), Vietnam’s economic connectivity to the rest of the major markets in the world should improve by leaps and bounds, with the lowering of import tariffs of “Made-in-Vietnam” products.
This will accelerate Vietnam’s growth as a manufacturing powerhouse made possible by its relatively cheaper labour (when compared to its illustrious neighbour China) and ease of access to port facilities (made possible by its long eastern coast lines and broad river networks).
Moreover, the signed ASEAN Economic Community (AEC) when fully implemented will create a single market in Southeast Asia, allowing Vietnam to experience an increase in Gross Domestic Product, jobs and wages. All these factors will work in Vietnam’s favour to greatly improve its standard of living and increase the demand for quality housing, as well as creating a more vibrant and sustainable real estate industry.
Real estate funds and developers are placing Vietnam on their radar; some acquisitions had already concluded successfully with Singaporean and Japanese institutional investors leading the way. However, widespread investment adoption rate from individual buyers into Vietnam properties is still slow as compared to more established investment destinations such as Thailand, England and Australia.
Individual buyers are warming up to Vietnam as a choice destination for property investments (due to Vietnam’s strong economic scenario), but the lack of comprehensiveness and circulars guiding the implementation of the law had prevented foreigners from entering the market en masse. Apart from the 1st July 2015 revision in Housing Law, additional circulars providing explanation and guidance in implementing the law have not been forthcoming. As of now, a lot of policies adopted by the developers selling Vietnamese projects are still subject to the developers’ own interpretation of the law, which is not necessarily a bad thing as they are in a position to take responsibility for the buyers.
2) There are 2 main areas to the East and South of Ho Chi Minh City’s Central Business District that fit all your requirements. District 2 (Thao Dien, An Phu) in the East is known to be a landed housing cluster where the local rich and Western expatriates like to stay. Recently, more high-end apartments with good facilities are being developed there. A lot of foreign developers choose this area due to the general affordability of land prices and the desirability of the location.
Capitaland’s “The Vista”, Keppeland’s “The Estella” and “Estella Heights”, Hongkong Land’s “The Nassim”, Daewon’s “Cantavil”, Hamon’s “Gateway Thao Dien” and Prudential’s “Imperial An Phu” are some of the more notable foreign invested projects. Most are joint developments with a Vietnamese counterpart.
Typical amenities in close proximity to the residences are restaurants serving foreign cuisines, international brand shops, supermarkets stocked with imported products and international schools. Depending on the quality of the developments, a high-end 3-bedroom apartment will cost you about USD180,000 to USD250,000 upwards (you could even get 3 to 4 units should you want to maximize your budget).
Another area for your consideration will be District 7 (Phu My Hung) to the South, nationally recognised for being a “model township”. This part of District 7 used to be a swamp land and over the course of 20 years, a joint-venture between the Taiwanese and Vietnamese known as Phu My Hung Corporation created a residential urban centre with modern amenities such as international hospitals, schools and commercial centres.
Riding on Phu My Hung’s coattails, some foreign developers also chose to locate their own projects in the surroundings of Phu My Hung Township. Notable projects in District 7 surrounding Phu My Hung are Keppeland’s “Riviera Point”, Pau Jar’s “Docklands Saigon”, Creed’s “An Gia Skyline” and Mapletree’s “SC Vivocity”. Similar to District 2, a 3-bedroom high-end apartment in District 7’s Phu My Hung and other surrounding projects will cost you upwards of USD180,000 to USD250,000.
In conclusion, by living in District 2 (Thao Dien, An Phu) and District 7 (Phu My Hung), you will have similar commute times to the Central Business District in HCMC; a commute by car will take approximately 30 to 40 minutes from both locations assuming decent traffic conditions (which is not too far from the city centre). Both locations also fit your requirements of having modern amenities and are relatively peaceful as compared to the hustle and bustle of city centre life.
3) Finally, you can unofficially rent out a single room within your 3-bedroom apartment or even your whole apartment, but by doing so, you will not be able to register your occupiers with the local police department and issue a tax invoice to the tenant to offset his tax liabilities, which is required under Vietnamese laws.