If you have been following global real estate news, then you must have heard of the Vietnam real estate craze. Investors can’t stop talking about it, and some even brag with their returns.
But is it the real deal? Is it one of those “too good to be true” type of things? Well, before you start Googling Real Estate Vietnam, here are the facts behind all of that.
For years, their economy has been growing, on average, 7% per year. In 2020, that growth is expected to range between 6.5% and 7%. But even if the low-end projections come to reality, it is still substantial growth, one of the biggest in the region. In all those years before, Vietnam’s real estate market always did well. Therefore, based on historical data, it is fair to assume that the real estate market will also expand.
Last year, Chinese investments exceeded 2.4 billion dollars. There is no official record of how much ended in the real estate market, but the percentage is supposed to be quite high. Just to put this number in better perspective, China is the fifth top investor in the country. Vietnam’s foreign direct investment fund has grown by almost 800% in the last decade. That also speaks volumes about Vietnam’s openness to foreign investments.
Foreigners are Welcomed to Invest in Real Estate
In 2015, Vietnam’s government made it possible for foreigners to buy real estate in their country. Any foreigner holding any visa, tourist or resident visa, can purchase property on a 50-year lease. Technically they won’t own the land, just the structure above it. But at the same time, even locals can’t own the land, only the structures above it. The 50-year leasehold option comes with a possibility for an extension.
Real Estate Prices are Lowest in the Region
A luxury apartment in Ho Chi Minh City costs between USD 3,000 and USD 6,000 per square meter. At the same time, equally luxurious apartments in Bangkok costs between USD 7,000 and USD 9,000 per square meter.
Just last year, the average price per square meter for luxury apartments in Ho Chi Minh City grew by 17%.
The rapid development of the country is one of the primary reasons why real estate property prices are soaring. The luxury property market is just one segment poised for massive expansion.
Economic and real estate development are closely followed by huge investments in infrastructure projects by the Vietnamese government. So far, they have added more than 2.000 km of highway, expanded airport capacities, railway expansion, new subways in its main urban centers, hospitals, schools, and so on.
Vietnam is on track to become an economic giant. Its galloping economy is the main force behind its emerging real estate market. Other data only proves and points to that. What’s certain is that the real estate market will grow! The only unknown thing is which segment of the real estate market will grow most.