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Vietnam is on the rise and opened up to foreign investors as late as 2015.
The government has made big changes to foreign property ownership regulations. Nowadays, you can buy a multiple amount of properties by simply having a tourist visa.
When it comes to locations, the by far most popular city where foreigners buy real estate is Ho Chi Minh City (sometimes just referred to as Ho Chi Minh or Saigon).
It’s not strange, as it’s the 2nd fastest growing city in the world at the moment.
As China’s labour costs, housing prices, and commodity prices increase, more and more property buyers has shifted their focus to Ho Chi Minh City.
Not to forget, people from Hong Kong, Singapore, and Taiwan struggle with high property prices back home and look for investment opportunities in emerging markets.
In this article, we take a closer look on how it works when buying apartments as a foreigner in Ho Chi Minh City.
Topics covered in this article
- Foreign ownership of property in Vietnam
- Ho Chi Minh City’s property market
- Rental yields in Ho Chi Minh City
- Real estate prices in Ho Chi Minh City
- Real estate agents and listings in Ho Chi Minh City
- Buying a luxury property in Ho Chi Minh City
- The best areas and to buy property in Ho Chi Minh City
Foreign ownership of property in Vietnam
The same as it goes in many other Southeast Asian countries, like Thailand, foreigners can’t own land in Vietnam.
One of the main reasons is that these countries rely much on the agricultural industry. Giving foreigners full ownership of land could seriously disrupt the economies. This is something that the governments want to avoid of course.
Instead, all land is jointly owned by “the people” in Vietnam and you’re able to lease land with a leasehold period of 50 to 70 years as a foreigner.
The government is currently considering to increase the leasehold period to 99 years, which is positive of course.
Hopefully, we’ll see even more changes and relaxations to foreign ownership of property in the coming years.
Vietnam’s new law on foreign ownership of property
Below I’ve summarized the key points you should know about Vietnam’s new law on foreign ownership of property (introduced in 2015):
- Foreigners can own maximum 30% of the units in an apartment project
- You can buy as many properties as you want (in other countries, the amount can be capped)
- You can buy property by simply having a tourist visa
- The first leasehold period is still 50 years, but can be renewed
- If you have a Vietnamese spouse, you can get a freehold tenure
Ho Chi Minh City’s property market
The property market has grown massively since 2013 and there are no signs it will slow down in the coming time.
Increased wealth among locals, a bigger interest from foreign buyers, and reduced mortgage rates are just a number of reasons why the real estate market continue upwards.
Ho Chi Minh’s luxury property market is particularly interesting and one of the most frequently mentioned in the media.
Real estate can still be bought for a fraction compared to many other places in the region, like Hong Kong, Singapore, Taiwan, and Korea.
Rental yields in Ho Chi Minh City
Ho Chi Minh City offers some of the highest rental yields in Asia, with rates stretching up to 6-8% in places like district 2.
Savills claims that rates average at 5.8% in Ho Chi Minh City and 7.8% in Hanoi.
With the new metro, finished by 2020, you can expect great capital appreciations and yields for apartments located close to the new metro stations. Have a close look at places like district 2 and district 9.
Metro Star, for example, is a project that will be integrated with the new metro line in district 9. It’s sold for as little as USD 1,500 per square meter, at the moment I’m writing this article.
According to CBRE who operates in Ho Chi Minh, properties located 10 minutes walking distance from the metro stations will see price appreciations of 10-20% when the metro is finished.
Real estate prices in Ho Chi Minh City
Ho Chi Minh City offers comparatively low real estate prices in Asia and is only outperformed by Cambodia (Phnom Penh) and Indonesia (Jakarta).
Property prices average at USD 2,269 per square meter in the central areas, while property in suburban areas averages at USD 1,083 per square meter.
Sounds almost too good to be true, right?
Buying luxury real estate in Ho Chi Minh City
The luxury property market is probably the most interesting in Ho Chi Minh at the moment.
Prices grew as much as 18% in 2018 and we’ve seen a big demand from both wealthy locals and foreign buyers.
Interestingly, Novaland, which is a local developer, accounts for around 25% of the new luxury projects. Still, there are plenty of foreign developers, like Mapletree and CapitaLand that have many new projects in the pipeline.
If you plan to buy luxury real estate, be sure that you work with a reputable agent, to assure you get the paperwork right.
Luxury real estate prices in Ho Chi Minh City
According to Bloomberg, a high-end unit averages at USD 45,500 per square meter in Hong Kong. In Ho Chi Minh, prices average at USD 3,800.
That’s 8% of the price.
Buying a 150 square meter high-end unit in Hong Kong would cost us almost USD 7 million, while the price would be USD 570,000 in Ho Chi Minh. Now that speaks for itself.
Real estate agents and listing websites in Ho Chi Minh City
It’s crucial that you find an experienced agent before you engage in the real estate market. This is especially the case for new and off-plan projects, that foreigners are normally only allowed to buy.
Some of the biggest real estate agents and listing companies in Saigon include:
The websites are easy to navigate and you can search for property in your preferred areas.
The best areas to buy property in Ho Chi Minh City
Ho Chi Minh is divided into a number of districts, often called District 1, District 2, District 3, and so it goes on. There are also a handful of districts with specific names, like Bin Tanh.
Let’s have a look at some of the most interesting places you should have a look at when buying real estate in Ho Chi Minh.
Buying an apartment in District 1
District 1 is the most centrally located district and you’ll notice that many foreigners and expats hang around in this area. It’s the financial center and also the most expensive area to buy property.
Here, you’ll find many of the main attractions, such as the Notre-Dame Basilica, the old post office, two of the city’s most famous landmarks.
Other famous attractions include the Theatre, the Bitexco financial tower (with a helicopter pad that looks like a lip), and Ho Chi Minh City hall.
Prices are more expensive in this area, but you can also expect great price appreciations in the long term. District 1 will always be attractive and is a preferred choice among wealthy buyers.
Buying an apartment in District 2
District 2, and especially Thao Dien, are some of the most popular areas for many Korean and Western expats. It has a high-end and family friendly touch.
In comparison with Shanghai, District 2 resembles Pudong quite much, which is located on the other side of the Huangpu river. Pudong was quickly developed during a time period as short as a decade.
District 2 have many international schools, like the British school, and many expats hang around in this area.
Interestingly, District 2 suffered from poverty, not long time ago. One reason is that it’s cut off and located on the eastern side of the river (again, similar to Pudong in Shanghai).
Previously being one of the poorest areas in Saigon, district 2 is being heavily developed with new infrastructure, schools, and hospitals. Bars and restaurants are popping up here and there, at the same time, you see new condo projects being built.
Some predict that District 2 will reach similar standards as some of the most developed cities in Asia.
Apartment prices in district 2
A 2-Bedroom condo unit like above can be bought for around USD 150,000, with rental incomes at around USD 800
MRT under construction in District 2. The subway in Saigon is built by Japanese companies, while the subway in Hanoi is built by Chinese dittos
Getting from District 2 to other districts
If you live in District 2, you’ll often take a cab through the Thu Thiem tunnel that connects it with District 1. You also have the option to cross the Thu Thiem bridge, arriving in the Bin Tanh district.
But improvements are on the way and you’ll find it remarkably easier to travel from District 2 to District 1, once the new metro line opens in 2020, that will connect the both sides.
Expect price appreciations and invest in property nearby schools, new malls, or the new metro line for higher price appreciations.
Buying an apartment in district 3
You might think that District 3 is located farther away from District 1, compared to District 2, but that’s not the case.
While District 1 hosts many of the tourist attractions mentioned, many foreigners prefer to stay in District 3. This includes everything from young people, expats, and families, who want to live in a more “bustling” area.
While District 2 is more low-rise with many beautiful villas, serviced apartments, embassies and malls, you’ll be sure to find colonial French style properties, coffee shops and bars in District 3.
There’s nothing better than to wake up early and take a long walk through historic areas during a Saturday, rounding off with a beer (trust me, it was one of my greatest weekend-activities in Shanghai).
District 3 is most famous for travelers and younger people, but has a generally lower standard compared to District 1 and 2. You’ll also find many locals living here.
Buying an apartment in district 5
District 5 is located Southwest of District 1 and 3 and hosts many of the Chinese people in Ho Chi Minh.
If you want to enjoy Chinese food, live close to the temples, and buy a more affordable apartment, you might better look at District 5.
District 5 is still fairly central and more affordable compared to District 1 and 2.
Buying an apartment in district 7
Many expats choose to live in District 7 to escape the congested areas of central Saigon.
With golf courses, Western restaurants and bigger, greener areas, this area might suit you better if you have a family and will reside in Ho Chi Minh during a longer period of time.
The same as it goes with District 2, people believe that District 7 will increase in popularity and attract more foreigners, as it’s foreign friendly.
You’ll be able to find properties that are cheaper compared to District 1 here, but with potentially higher capital appreciations over the years.
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