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In a recent article by Clarissa Sebag-Montefiore, published in the online edition of the Financial Times, the author argues that Vietnam, a country that wants to catch up with its richer Asian rivals it still offering good value for international homebuyers. A subsidiary of CVR: Central Vietnam Realty focusing on high-end sales – the Luxury Property Danang was mentioned in the article and we are very happy about that as we strive to bring the best of Da Nang’s property market to our clients.
Looking at the rising number of Golf Courses already built and over 60 more planned, many of which offer Golf Villas such as The Point within Danang Golf Club, it is pointed out how growing domestic interest in the sport, rising numbers of international tourists and an increase in foreign homebuyers are all helping to spur the growth.
Author also notes the importance of the new law:
“In July 2015, new laws opened up the Vietnamese property market to expats. Any foreigner with a valid visa, whether resident or tourist, can now buy property on a 50-year leasehold, with options for extension. There are restrictions: foreigners can only purchase 30 per cent of any single condominium building or a maximum of 250 houses in any one administrative ward (overseas Vietnamese, or Viet Kieu, are exempted from these limits).”
While the global financial crisis brought the prices down in 2008, the recovery is now very visible:
“Recovery came in late 2014, helped by a growing middle class, rising wages, and rapid urbanisation (by 2025, half of Vietnam’s population will live in cities). Cranes are once again rising across Ho Chi Minh City’s skyline, while construction workers camp in makeshift homes under highways and chimneys belch out factory smoke overhead.”
Author further points out that:
“Vietnam still looks like a bargain compared with the rest of Asia. Even in central Ho Chi Minh City, prime properties are priced at $3,000 to $5,000 per sq metre, well below Bangkok where equivalent properties cost up to $9,375 per sq metre. Rental yields in the country are 1.5 to 2.5 per cent higher than those in Hong Kong, Bangkok and Singapore, according to VinaCapital.
As such, Vietnam is shifting from a “frontier market [to] a place to invest in,” says Townsend. Coveted regions include the leafy expat enclave District 2 in Ho Chi Minh City. There, gourmet supermarkets and international schools sit next to riverfront restaurants such as The Deck Saigon, which serves foie gras dumplings and lychee cocktails.
Ha Long Bay, a Unesco world heritage site with a dramatic seascape of limestone pillars, is up and coming for second homes. Other coastal regions on the rise include Nha Trang in the south, Da Nang, which is Vietnam’s third largest city, and Phu Quoc island. Although rapidly developing, the latter is still significantly cheaper than Phuket or Bali.
Yet foreign uptake in these areas has been moderate at best. Local agents put this down to the fact that much of the legislation is still new. One issue is “getting money in and out of Vietnam once the home has eventually sold”, says Matthew Koziora, who leads the sales and marketing department at VinaCapital. Another is whether the home comes with a residential visa. “The new law does allow the foreign investor to generate rental income, but, once it is audited and local tax is paid, can that dividend be sent offshore? That has yet to be tested,” he says.
Vietnam has the potential to become a global tourism destination, says Jose Luis Calle, managing director of Lifestyle Retreats, who is developing a resort of 60 suites and villas in Mui Ne, on the country’s south-east coast. The numbers back him up. In 2015, 7.94m holidaymakers visited Vietnam, which together with 2014 were the highest numbers ever recorded. Direct international flights from across Asia to Da Nang more than doubled from 1,045 in 2012 to 2,521 last year.
The international buyers that have bought in Vietnam tend to gravitate towards well-established branded projects. At the InterContinental Sun Peninsula Resort in Da Nang, a beachfront four-bedroom villa with two pools is on sale for £3.28m, through Luxury Property Da Nang.
For now, business is doing very well though, not least in golf. VinaCapital says it has sold about 90 per cent of units at The Point, a community of homes arranged around an 18-hole golf course in Da Nang, with the latest crop of homes going to buyers from Singapore, Hong Kong and the US in particular.”