HA NOI - Vietnam's real estate market has been heating up with a rapidly increasing number of purchases made by not only locals, but also foreigners and overseas Vietnamese who are keen to get on the property ladder.
However, only the top developers in Vietnam have thus far had the confidence to market their products to foreigners and overseas Vietnamese.
Richard Leech, executive director of CBRE, reports strong sales to foreigners and overseas Vietnamese over the last two months following the enactment of the amended Housing Law. The law allows foreigners holding valid visas as well as foreign companies and organizations in Vietnam to purchase unlimited numbers of apartments and villas.
The amended law has eased restrictions which had long limited the number of foreigners and overseas Vietnamese eligible to purchase an apartment here. Alongside allowing the purchase of property, this new law permits foreigners to lease, mortgage and resell their homes.
The progressive legislation has significantly stimulated the real estate market and promises to bring savvy investors attractive gains.
"In Ho Chi Minh City, where there are more foreigners and more high-end launches, the response from foreigners has been good. We think that 50 per cent of our residential sales since July 1 have been to foreigners, which is huge," said Leech.
CBRE has recently been hosting sales events specifically geared toward expats and international customers, including events for Vinhomes Central Park, which is under construction in the southern hub and will feature Vietnam's tallest tower at 81 floors in three years.
The property has shown its pulling power already; at the first launch event after the new law took effect, 112 foreigners and overseas Vietnamese put down deposits to purchase condominiums. CBRE then held another exclusive event to market the project to South Koreans.
CBRE exclusive private event, introducing Vinhomes Times City – Park Hill to overseas Vietnamese and international customers
Some other developers in Ho Chi Minh City have also cashed in on the new law. CBRE estimates that high-end projects with good locations, adequate facilities and developed by prestigious investors have sold up to 20 per cent of their properties to foreigners and overseas Vietnamese over the last two months.
In Hanoi, Park Hill is the first and only housing project holding sales events exclusively for foreigners and overseas Vietnamese, with around 100 of them attending the event hosted by CBRE last week.
Park Hill is the second phase of the Vinhomes Times City township development. The first phase has been completed, with thousands of apartments already occupied. Park Hill has been the best-selling project in Hanoi in recent months.
Park Hill meets the requirements of the most discerning overseas Vietnamese and international customers thanks to its prime location, beautiful landscaping and integrated facilities for high-class living.
Park Hill is attractive to home buyers due to its prime location at the southeastern gateway into the city, which is only four kilometers from the central business district. It provides convenient links to office buildings in other parts of the city as well as industrial parks in Bac Ninh and Hung Yen provinces.
Leech says that such projects as Vinhomes Central Park and Vinhomes Times City - Park Hill are particularly interesting to foreigners on account of the many resort style facilities that they offer.
Inspired by Singapore's green architecture, Park Hill combines urban living with a resort lifestyle. The development reserves more than 70 per cent of its area for leisure spaces, with key features including an iconic clock tower, a green hill overlooking the development, a splash park, and an outdoor and indoor swimming pool system.
In addition, Park Hill is a self-contained community, featuring many facilities including Vincom Mega Mall, Vinschool, Vinmec International Hospital, sports centers and open spaces for family activities.
Andrew Nguyen, an overseas Vietnamese from Germany said: "I am very interested in the greenery and landscape within Park Hill and I will buy an apartment looking out over the southeast so that I can have a panoramic view of the central square, the promenade, and the landscaping cascade."
Property consultants say the new Housing Law has been a catalyst reinvigorating the real estate market, but some caution that the projects may not all attract foreign interest because this clientele is more discerning with high-standards.
"Vingroup has a reputation for completing their product on time and to quality standards with the kind of design and layout that foreign buyers look for. Generally, Vinhomes projects are quickly occupied, creating a strong community that improves the rental yields when it comes to letting," said Leech.
When foreigners buy homes, they are chiefly concerned with the price, quality and location. They ask many questions about the administrative process, potential capital gains and rental yield. They look far into the future and are concerned by any implications or problems related to selling their assets when the time comes.
In addition to those purchasing a house, many are buying-to-let as returns on letting in Hanoi and Ho Chi Minh City can reach as high as 6-8 per cent compared to only 2-3 per cent in Bangkok and Singapore.