Vietnam’s real estate market became the second most attractive investment field for foreign investors after it lured 1.1 billion USD in foreign direct investment (FDI) during January-April, or 7.5 percent of the total FDI inflow just behind the manufacturing and processing sector.
|Vietnam’s real estate market becomes the second most attractive investment field for foreign investors. (Photo: vietnamfinance.vn)
In recent years, the property sector has been appealing to Asian investors, particularly those from China and Hong Kong.
A survey conducted by CBRE Vietnam on its successful transactions in Ho Chi Minh City, Chinese buyers of high-end and luxury property products accounted for 2 percent of the total customers in 2016, and 4 percent in 2017. However, the rate surged to 31 percent in the first nine months of 2018.
Earlier, realty products were only purchased by foreigners who lived and worked in the country but now they decide to own Vietnamese houses even when they have not set foot to the country yet. In fact, Vietnamese developers have actively advertised their projects in foreign countries, helping individual investors have deeper insights into the Vietnamese property market.
While a number projects were introduced in Singapore and Hong Kong in 2016 and 2017, developers strongly promoted their products in China’s Shanghai and Beijing in 2018.
CBRE said more Chinese investors have become interested in HCM City’s property market because they saw the development similarities between the southern economic hub of Vietnam and Shanghai.
Three decades ago, Shanghai was almost like HCM City at present with many vacant land areas and low-rise buildings. Now, Shanghai is one of the world’s leading financial centres with soaring property prices.
An Gia Investment said that it has sold more than 80 realty products of River Panorama and Sky89 projects to Hong Kong customers. Last month, over 30 brokers from the Asia Bankers Club came to Vietnam to work with the project developers, aiming to make meticulous preparations for product marketing and distribution in Hong Kong.
Experts from Savills Vietnam said that foreigners have been more interested in acquiring high-end apartments in Vietnam amid a fall in housing supply. The foreign occupancy rate is almost at 30 percent right at the launch of the apartments.
Besides, foreign investors also started their engagement in property development in Vietnam. For example, Singaporean-based CapitaLand announced in 2018 that it spent around 29.78 million USD buying a 0.9-hectare land lot in Tay Ho district, Hanoi, and 60 million USD on a 6-hectare lot in HCM City’s district 2 to develop its housing projects.