How will the property market of HCMC be in 2018?

The property market will continue to grow this year, the HCM City Real Estate Association (HoREA) predicts. In a forecast it has sent to the Government, HoREA said one- and two-bedroom apartments price at below 1 billion VND (43,800 USD) would be the best-selling segment and have the highest liquidity.

“The social housing segment will further develop while there will be a restructure of the high-end segment to meet market demand,” it said. “Condotels and land plots in housing projects will continue to be in great demand. Disputes over apartment buildings will be more knotty and need to be resolved in a timely manner.” Le Hoang Chau, chairman of HoREA, said the city real estate market would expand this year to neighboring regions. Investors, both domestic and foreign, would strengthen co-operation, he said. The market will develop more steadily with online trading becoming more popular and more green constructions that are environment-friendly becoming trendy.

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The association said there would be a raft of mergers and acquisitions this year, boosting construction activities in the city. Foreign direct investment would remain the main source of funding for the market. There is no threat of a bubble this year thanks to timely action by the Government. Furthermore, developers too have made efforts to tweak their investment so that they develop products that match the actual demand in the market. Buyers are becoming smarter and understand the market clearly.

In a report it released two days ago, global property consultant CBRE said, “In 2018 the mid-level segment will continue to account for the biggest proportion of the market, while the high-end and luxury segments will observe more considerate new supply, helping the market develop more sustainably.

The east and south will continue to be the hotspots of the market, with more new launches in districts 2, 7, 8, Binh Thanh such as One Verandah, GEM Riverside, Midtown, High Intela, Green Field. The average selling price in 2018 is expected to increase by 3 percent, with high-end and luxury segment showing an increase of 5 percent, and the mid-level and affordable segments increasing at a lower rate of 1.5 percent. The association said in 2017 the real estate market grew at over 4 percent. The medium and low-end segments saw high demand and accounted for 74 percent of the market, adding that FDI was at record levels.

In HCM City, real estate accounted for the second highest level of FDI last year. Domestic developers still dominate the market, it said, listing Vingroup, Hung Thinh, Phuc Khang, Khang Dien, Novaland, Thu Duc House, Son Kim, CityLand, and Him Lam as some of the major players. In its document, HoREA said there were five hurdles facing the city real estate market in 2017, and they affected transparency and growth. It listed them as land-use fees, land acquisition, project sale, credit policy and administrative procedures.

Source: Vietnamplus

February 1, 2018 / by / in
Vietnam’s hotel and resort market must make changes to develop

Vietnam’s hotel and resort real estate needs to have a comprehensive plan to ensure its development is on the right track. According to Mauro Gasparotti, director of Savills Hotels Asia Pacific, the hotel and resort property market of Vietnam was growing, driven by strong increase in the number of foreign tourist arrivals in recent years.

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Recent updates of the Vietnam National Administration of Tourism showed that the country received 11 million foreign tourists so far this year, representing a rise of 27.8 percent over the same period last year. The increase was thanks to the launch of a number of international flight routes, together with easier visa policies. Hotel occupancy rates saw a significant increase in major tourism cities such as Hanoi, Ho Chi Minh City, Da Nang and Nha Trang, according to Savills Hotels.

However, a majority of the hotel rooms were located in coastal areas while condotel count outnumbered resort rooms, Gasparotti said, warning that this would lead to serious competition in hotel room prices. He said several developers did not pay adequate attention to the planning of their projects, adding that some focused simply on building their hotel projects with as many rooms as possible without giving thought to how to increase the added value of their projects. It was critical for the hotel and resort real estate segment of Vietnam to have a comprehensive plan to ensure long-term sustainable growth, he said.

Vo Kim Trang from Savills Hotels also said developers needed to have a long-term vision. “Developers will need to know tourism trends and changes in tourist demand, which will affect the development of hotel and resort products in the medium and long terms, rather than just focus on revenue in the short-term.” Savills Hotels also pointed out that Vietnam lacked diversification in products compared with destinations such as Thailand and Indonesia. The global market was currently witnessing new kinds of developments, such as resort wellness, resort spa, co-working hub and hi-tech hotel.

Morris Sim from Next Story Group, a hospitality management, marketing, design, franchising, investment and development company headquartered in Singapore, said developers in Vietnam should diversify their hotel and resort products to meet the increasingly diversified demand of tourists. Sim also said the sharing economy and social marketing were significantly affecting the hotel and resort property market with a new technology-savvy generation showing a new trend for working and traveling. Next Story Group said hotels and resorts must make changes to maintain and improve competitiveness.

Source: Vietnamplus

December 18, 2017 / by / in
The trend of mid-priced apartment in Ho Chi Minh City

Report of CBRE Vietnam

The mid-priced apartment segment in Ho Chi Minh City is developing strongly with demand and supply and liquidity all looking up, especially in the eastern part, experts said. A report from market researcher CBRE Vietnam said the segment, with prices ranging from $800 to $1,500/sqm, accounted for 60 percent of third quarter launches.

The HCM City Real Estate Association had predicted at the beginning of this year that the property market would see a strong restructure, with developers switching from luxury to mid-priced apartments. It had explained that the re-balancing would take place to resolve the mismatch between demand, which was overwhelmingly for cheaper units, and supply, which was skewed in favor of high-priced ones.

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Dau Tu newspaper (Vietnam Investment Review) quoted Vinh Kiem, an investor in HCM City, as saying that mid-range apartments built by prestigious developers bring solid returns to buyers. Since prices are not high, an investor can buy several at a time, according to Kiem. Last May, he bought two apartments in District 9 at around 1.7 billion VND each and now they have both appreciated by 300 million VND. But he is waiting for the prices to rise even further.

For people looking to buy houses to live in them too, mid-priced apartments are a good choice since many are in good locations and offer many amenities. To meet the growing demand in this segment, several major developers like Vingroup, Hung Thinh and Him Lam Land have launched many projects. But projects in the eastern part of the city, in places like districts 9 and 2, are customers’ favorites and are thought to bring profits of 20-50 percent to buyers.

Investors said apartments here are in high demand thanks to the excellent and constantly developing infrastructure, including the city’s first metro route. The news that authorities are planning to build the Rach Chiec Sports Centre in District 2 for SEA Games 31 has sparked off even more interest in the area. Investors now expect the market to remain strong for the next two years.

Source: Vietnamplus

November 2, 2017 / by / in
Limit 30% of foreign ownership about the realty projects in special economic zones

Foreign investors will be restricted to 30 percent ownership of real estate projects in Vietnam’s future special economic zones if a new draft law is approved, despite government promises of added incentives to attract overseas investment. The cap is the same as the one currently imposed across the country.

The Law on Special Economic and Administrative Units, which is being drafted at the moment, would grant foreign investors 99-year leaseholds on properties in new investment areas, almost twice the 50-year terms granted elsewhere in Vietnam.

But a major barrier remains as the law would only allow foreigners to buy up to 30 percent of an apartment building or resort project in these areas, said Tran Huy Dong, director of the Economic Zones Management Department at the Ministry of Planning and Investment. The limit is to guarantee security and prevent acquisitions by foreigners in special economic zones.

He said the heads of these zones will have to consult the Ministry of National Defense and the Ministry of Public Security before granting any land to foreign investors. However, the policy will be open to changes depending on investors’ demands. Vietnam is preparing to develop special economic zones in the northern province of Quang Ninh, the central province of Khanh Hoa and the southern resort island of Phu Quoc.

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The government has cast them as major investment magnets along the lines of Singapore and Hong Kong. The investment ministry said that investors in these special zones will receive greater incentives and fewer restrictions than in Vietnam’s 18 existing “normal” economic zones, and they will be free from local regulations. Casinos have been approved in these zones, which will be the first in the country to be licensed to receive Vietnamese citizens.

Phung Quoc Hien, vice chairman of the legislative National Assembly, even suggested opening “red-light districts” in these zones at a meeting earlier this month. Life has such realistic demands. We’ve got to go with the flow and work out an appropriate management mechanism.

This draft law is expected to be presented to the National Assembly in May next year.

Source: VNexpress

September 27, 2017 / by / in
Ho Chi Minh City will not allow to build the small apartments

According to the latest news, Ho Chi Minh City has decided not to allow investors to build commercial apartments under 25 square meters (270 square feet) out of fear that fast urbanization and population growth may spiral out of control. In a letter sent to the Ministry of Construction, the city said small apartments are not part of its development plans. Small apartments would allow more people to buy property in the already overcrowded city, which would lead to population growth and more pressure on infrastructure, it said.

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To strengthen its argument, the city stated that it does not want to create “elevated slums”. In a letter issued in April to a domestic developer, the ministry said the firm would be allowed to build 25-square-meter apartments to attract low-income earners before new national standards for apartment sizes are set.

Vietnam’s 2015 construction law abolished a previous requirement that set the minimum area for an apartment at 45 square meters, but did not stipulate a new limit. In December 2015, a government decree on housing development for low-income earners came into force and set the minimum area at 25 square meters. Decrees often require guidance from related ministries before they are implemented.

Construction businesses and provincial authorities have been seeking permission to build commercial houses of 30-40 square meters to attract individuals, small families and low-income buyers, and they have been given the go-ahead due to the huge demand, the construction ministry said. Vietnam currently has 2.2 million people working in industrial parks, but only 20 percent of them have their own homes, according to the ministry.

HCMC’s decision appears to be its latest attempt to rescue itself from the infrastructure mess it has found itself in. The city has already instructed its construction department not to license any more high-rise condo buildings on roads that simply cannot handle them. This follows high-rise projects on Ung Van Khiem St and Nguyen Huu Canh St in Binh Thanh District and Ben Van Don St in District 4 that have put immense pressure on infrastructure, local media reported.

Tim Doling, a British author who has studied Vietnam’s history and tourism extensively, wrote on his Facebook page: “More warnings that continued construction of massive ugly high rises along the city’s main arteries will cause infrastructure to ‘break down’, with increased risk of flooding and further heavy traffic pressure.” Ung Van Khiem St is less than 2km long but is now home to around ten condo projects, while Nguyen Huu Canh St, one of the main roads connecting the eastern part of the city with the downtown, often suffers from flooding and heavy traffic jams.

Explaining the reason for these projects, the construction department said it had been given the nod to make adjustments to the city’s development plan by allowing investors to build more high-rise buildings in those areas. The Department of Transport said “due to the need to streamline administrative procedures, it hasn’t been invited to comment on residential apartment construction.” The city may be trying to make amends for the situation by putting high-rise condo buildings on hold and saying no to small apartments, but experts have described its solutions as “locking the stable door after the horse has already bolted.”

Source: VNexpress

September 18, 2017 / by / in
More 750 foreigners own the property in Vietnam

Even though Vietnam has relaxed the policies that allow foreigners to buy houses in the country, the numbers are not as high as expected. More than 750 foreigners have been granted house ownership certificates in Vietnam since the Law on Housing came into effect in 2014, reports the Ministry of Construction. The figure is six times higher than that of eight years since Vietnam implemented the Resolution No 19/2008/QH12, which piloted the scheme to allow foreign organizations and individuals to buy and own homes in the country.

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However, a representative from the Ministry of Construction’s Housing and Real Estate Market Management Department told the Vietnam News Agency that the number of foreigners buying houses in Vietnam was still low due to many other factors including their financial capacity, jobs, demand and the cost of real estate.

The regulations on housing and the policies on house ownership in Vietnam have been relaxed including the conditions of house ownership and the number of houses being owned by foreigners, which all suit the current situation, the representative said.

Mr Nguyen Khanh Duy, director of sales at Savills Vietnam in Ho Chi Minh City, said legal procedures on real estate ownership of foreigners in Vietnam had basically received positive feedback from both buyers and sellers. The attraction of foreigners buying homes in the country in accordance with the law is expected to develop the country’s real estate market, especially in the segment of luxury housing which is abundant.

Source: Vietnamnews

September 7, 2017 / by / in
Developing social housing in Ho Chi Minh City

The experts have estimated the shortage of social housing for the locals, especially in the big cities like Ho Chi Minh City and Hanoi. Therefore, Ho Chi Minh City aims to build about 20,000 social houses, 35,000 concentrated residential places for workers at industrial parks and 10,000 others for students during 2016-2020.

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To that end, the city will classify subjects to social housing, targeting revolutionary contributors, low-income earners, the poor, those near the poverty line, workers in and outside industrial and processing zones, and officials, according to Tran Vinh Tuyen, Vice Chairman of the municipal People’s Committee. The houses will be built in different areas to serve different purposes and sold at prices ranging from 300 million VND ($13,200) to about 1 billion VND ($44,000), he said.

At the same time, the locality will adjust the State budget for social housing, accelerate administrative reform to make it easier for relevant investment procedures, and publicize the list of eligible social housing projects. The national housing development strategy targets 12.5 million sq.m of social and affordable housing by 2020.

Source: Vietnamplus

August 10, 2017 / by / in
Investment in Vietnam’s realty market is absolutely popular

In the recent years, the realty market has become more active and dynamic in Vietnam, especially the segments of Hanoi and Ho Chi Minh City. Therefore, instead of putting money in banks, gold or dollars, investment in property is more attractive to the investors.

Minh Hanh of Ho Chi Minh City’s Tan Phu District, for instance, said: “I never put my money into saving accounts because I used to invest in gold and dollars. But now I invest my money in real estate and stocks because gold prices have decreased sharply and the gap between domestic and international prices is too big.” Since 2010, gold has plateaued. The Government has tightened gold management and banks are not allowed to mobilize or borrow gold any more.

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This year, the real estate market has gathered pace and been a magnet for investors. Duc Vinh of Ho Chi Minh City’s Go Vap District said last October he had bought a piece of land for VND2.6 billion ($115,000) and planned to build a house. But half a year later, a buyer offered VND3.5 billion ($155,000) for it and he sold it immediately.

However, Vinh’s profit is not considered huge in the current market situation. Hoang An, a broker in District 12, said now everybody wants to buy land because of high profits and liquidity. Things have turned on their head from a few years ago when prices were low yet it was difficult to sell land. “Bank savings interest rates are very low, gold and dollars do not yield high returns and investors are looking for better investment opportunities,” he said.

“Inflation has been controlled well in recent years and buying gold as a hedge has reduced.” Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s Ho Chi Minh City branch, said the loans given to the property sector in the city are worth VND238 trillion ($10.6 billion) or 10.8 per cent of the total.

The Ho Chi Minh City Real Estate Association reported that in the fist six months of this year lending to the sector increased by 6.35 per cent, 1.35 percentage points higher than in the same period last year. Real estate firms accounted for a full third of the 18,000 companies established in the city in the first six months of this year.

July 26, 2017 / by / in
Japanese firms invest in real estate market in Vietnam

Many Japanese firms such as Mitsubishi, Maeda, Kajima, Sumitomo and Creed Group have made investments worth tens to hundreds of millions USD in the Vietnamese realty market within over the past year. For example, the Mitsubishi Group has invested 290 million USD in a joint venture with Vietnam’s Bitexco to develop the Manor Central Park in Hanoi. In the first stage of cooperation, the two sides agreed to establish a joint venture to develop 240 low-rise buildings and two high-rise buildings with 1,036 apartments.

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In September 2016, the Kajima Overseas Asia Company spent $500 million to establish the Indochina Kajima Development joint venture with Indochina Capital. Both plan to invest in Vietnam’s real estate market in the next 10 years. More recently, Sanyo Home invested in the field via cooperation with Tien Phat Company under the Hoa Binh property business and construction joint stock company to invest in the Ascent Lakeside project in District 7, HCM City. Meanwhile, Sumitomo will invest in the Nhat Tan-Noi Bai urban area in Hanoi along with Vietnam’s BRG Group.

According to Toshihiko Muneyoshi, president of the investment fund Creed Group, with a population exceeding 93 million people, increasing incomes and rapid urbanization, the demand for houses among young customers is huge. Notably, each year, 50,000-60,000 new households are expected to be built in Hanoi and Ho Chi Minh City, he said, adding that the fund will focus on the middle-range segment and seek more partners in Vietnam. Japanese investors have secured their position in Vietnam in recent years with 3,411 projects worth nearly $44 billion.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, in the first six months 2017, Japan rose to first position in 94 countries and territories with investment projects in Vietnam, with total registered capital of $5.08 billion, making up 26.45 percent of total investment.

Source: Vietnamplus

July 24, 2017 / by / in
The real estate market gets the highest sales since 2011

According to the report of Real Estate Firm Savills, the affordable housing went through the roof, with Quarter 2 sales jumping 123% in Ho Chi Minh City. It saw a strong performance in the apartment business in the second quarter this year, thanks largely to the affordable segment.

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Apartment transactions between April and June increased 33% from the first quarter of the year, and by 67% from the same period last year, with 11,600 units sold, according to figures from real estate consultancy firm Savills. The number was the highest since 2011, the year of the city’s housing crisis. The affordable housing segment accounted for 64% of the sales, the company said in a report released on Monday.

While transaction volume in the top-tier dropped 32% on-year, sales of more affordable units costing less than 30 million VND ($1,320) a square meter surged a whopping 123%. With 58,000 new households (families) formed in 2016, Ho Chi Minh City has the biggest real estate market in Southeast Asia, the company said, but in terms of affordability, it is among the worst in the region.

The market has for years focused on the high-end segment, where prices hit 90 million VND (nearly $4,000) per square meter. That would mean it would take two working adults 20 years to pay for a 60 square meter apartment, based on the city’s average income in 2016. Besides, many people in the city are migrants and low-income workers.

Savills research suggests that the market is changing and will continue in an affordable direction to catch first-time buyers. Low-cost apartments are expected to occupy nearly half of the apartment market in the city this year, with a further 48,000 units to be launched by the year-end.

Source: VNexpress

July 13, 2017 / by / in