According to VTVAccording to experts, each real estate segment of the Vietnamese market in 2024 will have its own investment highlights that attract foreign investors.
Information from Vietnamese people, according to CBRE Vietnam report, since 2015, the Government has begun to remove barriers so that foreigners can own real estate in Vietnam. Since the home ownership policy for foreigners was relaxed, customers from Asia, including China, Hong Kong and Taiwan (China), have become large investor groups in the housing market. Vietnam. Among them, the apartment real estate segment is popular.
Specifically, in terms of product type, CBRE said that for every 10 customers, there are 9 foreigners choosing to buy apartments, especially the high-end apartment segment in Ho Chi Minh City and Hanoi. Projects with beautiful locations and reasonable prices, with the potential for strong price increases in the future, are also the investment preferences of many foreign investors.
Each real estate segment of the Vietnamese market in 2024 will have its own investment highlights that attract foreign investors. Illustration photo from the internet
“Vietnam's residential real estate market has the potential to increase prices more strongly than other countries in the region. This was also the time when Vietnam's housing market increased in price similar to other countries before. Therefore, the reason why 60% of foreign customers buying real estate in Vietnam have investment purposes, waiting for asset prices to increase to make a profit. A few will rent out their apartments as a temporary solution while waiting for the selling price to increase. Not really many foreigners, mainly those who plan to live long term in Vietnam, will buy houses for their own use," CBRE said.
According to statistics from the Ministry of Construction, there were more than 3.000 foreigners buying houses in Vietnam by the end of the third quarter of 2023, of which 90% bought apartment products. The number of foreign customers mainly comes from countries such as China, Hong Kong, Taiwan, and Korea. This is a large group of investors in the Vietnamese housing market, partly thanks to the geographical distance of these countries to Vietnam. Among them, foreign organizations and individuals have owned and bought houses in Vietnam, concentrated mainly in large provinces and cities such as Hanoi (1.765), City. HCM (850), Bac Ninh (110), Binh Duong (210), Ba Ria – Vung Tau (50)…
According to current regulations, although there is no limit to the number of houses a person can buy, the law also clearly stipulates the maximum number of foreigners allowed to own within a project, specifically at 30. % of the total number of apartments for apartment projects and no more than 250 townhouses in a ward-level administrative unit.
The long-term rental period is set at 50 years and can be extended depending on current law but not exceeding 49 years or can be converted to long-term ownership if the foreigner marries a Vietnamese.
According to VTV, the office real estate segment also received a lot of attention. The market witnessed demand growth from the energy, manufacturing and consulting businesses, contributing to maintaining a stable occupancy rate.
Especially, in big cities like Hanoi, Da Nang and City. In Ho Chi Minh City, office market trends open up opportunities for foreign investors with investment capacity and positioning products that meet green standards such as LEED, WELL, BREEAM certificates...
Particularly for the Hanoi market, foreign investors have begun to expand their investment scope in developing areas of the city instead of concentrating in central districts. This is also a move to catch the movement trend of office groups of public and private administrative agencies, the development of city transportation infrastructure and the trend of population concentration in a number of large urban projects including around the city.
For the retail sector, the entry of "giants" in the retail sector has demonstrated the prominence and attractiveness of the Vietnamese market. Large investors are actively looking for land funds to deploy large-scale modern commercial and service real estate projects, focusing on consumer experience.
Typically, in early February 2, retail real estate "tycoon" Central Pattana - a member of Thailand's leading retail group Central Group, was preparing to establish a legal entity in Vietnam to enter the market. This vibrant retail market.
Or before that, THISO (a member group of THACO) after opening the 3rd Emart hypermarket in the city. Ho Chi Minh City has shown its strategy to expand the 4th hypermarket in the North with the acquisition of a 2,4 hectare land fund in Tay Ho Tay Urban Area.
The hotel market segment also shows that it is on the recovery path. According to Savills Vietnam Market Report, hotel occupancy and rental prices in Hanoi and City. Ho Chi Minh City all recorded an increase. Specifically, rental capacity in Hanoi increased by 21% year-on-year with average nightly rental price increasing by 28% year-on-year.
Similarly, hotel occupancy rate in the city. Ho Chi Minh City increased by 18% year-on-year with the 5-star segment and this is also the segment showing the strongest improvement, reaching 61% and the average room price increased by 14% year-on-year, reaching 2,9 million VND/room. /night.
The operating situation of the hotel segment is continuously improving, many foreign investors appreciate the resilience of this segment and believe in the development potential of the hotel market in Vietnam. Many foreign investors believe that this is also the right time to enter the market.
With advantages from macro factors and attraction in most real estate segments, Vietnam is becoming a promising investment destination for foreign cash flows and investors. Especially when foreign investors are becoming more open in their investment forms than before.
Expectations from Vietnamese investors
According to Saigon Economics, the 2024 Land Law has an important new point: Overseas Vietnamese (people residing abroad, without Vietnamese nationality) can buy houses in the country more conveniently and enjoy full land rights. land, housing like domestic citizens and Vietnamese residing abroad.
Specifically, Article 4 of the Land Law 2024, regulations on land users, is supplemented with Vietnamese origin groups residing abroad but without Vietnamese nationality. This group will enjoy full rights to land and housing like domestic citizens and Vietnamese residing abroad (those who still have Vietnamese nationality).
Article 28 of this Law specifically stipulates that people of Vietnamese origin residing abroad are allowed to enter Vietnam to buy and rent houses attached to residential land use rights, and receive residential land use rights in development projects. House; inherit the right to use residential land and other types of land in the same plot of land with the house.
Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, said that this change will bring more investment opportunities to the group of overseas Vietnamese real estate buyers. Because according to statistics from the State Committee for Overseas Vietnamese, the amount of remittances to Vietnam from 1993 (the first year of remittance statistics) to the end of 2022 reached over 190 billion dollars, nearly equal to the amount of remittances. FDI capital disbursed in the same period. In 2022 alone, a record remittance source of 19 billion dollars has put Vietnam in the group of 10 countries receiving the largest remittances from abroad.
The demand for remittances for the real estate sector has been noted. According to a statistic from 2016 of the Central Institute for Economic Management Research, about 15-20% of that amount is invested directly in real estate. If we do a quick calculation, this number alone can amount to about 10.000 apartments per year.
“The change in legal regulations creates great potential for the market thanks to direct investment capital from overseas Vietnamese. In the past, overseas Vietnamese who wanted to invest back in Vietnam had to go through relatives or relatives, thus leading to some unnecessary disputes. The new law will solve this problem, create more favorable conditions for investment and minimize the possibility of risks between parties during the investment process," said Mr. Troy Griffiths.
An expert believes that the housing supply in Vietnam is focusing on the high-price segment, accounting for a large proportion of high-end and luxury apartments. If real estate opens its doors to overseas Vietnamese, these segments will have strong demand stimulation, solving the problem of supply exceeding demand. Along with other comprehensive solutions, the real estate market will soon balance supply between product lines, narrowing the distance to the recovery cycle.
Dao Vu (Th)
