Property market fuelled by Viet kieu
A welcoming climate of safety, security, and better pre- and post-sale services is attracting overseas Vietnamese back to their motherland for property purchases.
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According to Sunny Hoang Ha, associate director of International Sales for Savills Ho Chi Minh City, many overseas Vietnamese (Viet kieu) and foreigners have been showing interest in buying property in Vietnam.
John Tran, a US San Jose-based Viet kieu, told VIR that he decided to buy properties in Ho Chi Minh City not only due to it being his hometown, but also for investment reasons.
“Despite being born and having grown up abroad, I still keep my eyes on the development of Vietnam. I saw that in recent years, the property market here has been quite active. In particular, the renting yield is very attractive, which helped me to decide to invest in this market,” Tran told VIR.
He added that, like many other Viet kieu who are hunting for a property in Vietnam, the business centre regions, like districts 1 and 3 of Ho Chi Minh City, are the most attractive.
Another Viet kieu, who wished not to be named, told VIR that he was looking for developers who want to mobilise investment capital into real estate projects.
“Our team of Viet kieu now has about US$10 million in available funds and we wish to invest in potential realty projects with promising sales or leases, or lend developers with an interest rate equal to or one percent higher than banks’ deposit rate,” said the source.
David Tran, another US Viet kieu also said that with the Vietnamese stock market fluctuating, and with low interest in gold and savings, investment in real estate is one of the good alternative solutions, with rental yields from 6 to 8%.
“The investment flow from Viet kieu has been also backed by the growth rate of Vietnam’s economy, its stable political status, and the now more accessible policy for Viet kieu and foreigners to purchase houses in Vietnam,” said Hoang Ha.
As an emerging real estate market, Vietnam is now considered an attractive investment destination for Viet kieu.
Savills Vietnam has recently organized free tours for overseas Vietnamese to visit potential projects during the Lunar New Year holiday. Through this process, customers learn about the market and become familiar with all the necessary procedures to ensure the most secure and advantageous investment decisions.
Hundreds of inquiries from Viet kieu living in the US, Canada, Australia, and various European countries who wanted to buy houses in Vietnam were sent to Savills this new year season.
“Their favourite option is apartments in the medium and high-end segments with one or two bedrooms. Viet kieu want to buy houses in Vietnam for asset accumulation or to lease out,” said Hoang Ha.
According to recent figures from the World Bank, about US$13.8 billion inwards remittances (IR) landed on Vietnam last year, a 16% jump on-year and a record level for the past five years.
Savills Vietnam’s latest report showed that around US$5.2 billion worth in IR came to Ho Chi Minh City alone in 2017, up 4.5% against 2016.
About 21-22% of Vietnam’s IR come to the real estate sector, just behind the production and manufacturing sector, meaning that with a stable IR flow averaging US$12 billion annually in recent years, the real estate market could lure about US$2.5 billion in IR each year.
