Week 23/2020 – Central Vietnam Real Estate News Summary
In this weekly or sometimes bi-weekly news flash – CVR: Central Vietnam Realty will provide a choice of articles from mainly Vietnamese media sources related to real estate market in Vietnam.
We will be focusing on issues related to Da Nang and Hoi An, while also looking at national news and their possible impact for Central Vietnam’s property market.
You will find a summary, link to the source as well as CVR’s take on the article.
We believe that local knowledge is the key to making the best possible decision and that’s what we offer to all our clients.
“CVR: Western Management – Local Knowledge”
- In an article titled “03 important factors for real estate investors”, the author points out that aside from some foundational elements of an investment such as location, price, or convenience, investors should focus on these three important factors; capital appreciation, safety, and liquidity of assets.
First, capital appreciation is based mainly on infrastructure and the community. The opportunity to develop a modern infrastructure to meet the needs of local communities, plus the quality and high demand of a project, will result in a higher chance of gaining property value.
The safety and liquidity elements of an investment are also very crucial. Investors should compare different opportunities such as the stock market, gold, land, and apartments, etc.
Specifically, investing in apartments often has high liquidity because of stable market demand, and supportive payment options from financial organizations.
CVR believes this information will help investors make better investment decisions. This article also suggests that investment in Da Nang apartments is a worthy consideration.
- The title of the next article is self-explanatory: “Da Nang to build urban areas to relocate its population in the West”
Proposed urban expansion to the West of the Hoa Vang district recently approved by the City People’s Committee. Model ecological urban area projects and planned North-South railway and highways contribute to the proposed expansion.
It is clear to see that the western part of the Hoa Vang District boasts great potential for the development of tourism, hi-tech, and agricultural production. It is estimated that the population of Da Nang will reach over 2 million people in 2030. Therefore, it is necessary to establish satellite urban areas to support this growth. In turn, the expansion will stimulate real estate investment and give local residents opportunities to develop their businesses in a new area.
- An interesting article by Khanh Trang addresses foreign investors: “Ha Noi announces 22 housing projects available for purchase by foreigners”
As the author points out, Hanoi Construction Department has just announced 22 commercial housing projects that allow ownership by foreign organizations and individuals. These projects are located in Ha Dong, Long Bien, Thanh Xuan, Hoang Mai and Cau Giay districts.
The list of projects can be found here: http://batdongsan.com.vn/chinh-sach-quan-ly/ha-noi-cong-bo-22-du-an-nha-o-duoc-ban-cho-nguoi-nuoc-ngoai-ar104176
We believe this is an opportunity to attract foreign buyers to Vietnam as an investment option or second home. We are also happy to see more projects being approved for foreign purchase in VN!
- The next note worthy article suggests: “Short of tenants, serviced apartment industry face many difficulties”
In this article, the author discusses the wave of discounts offered by hotels and resorts, making owners of serviced apartments face many difficulties. Since February, the demand for tourism has decreased by nearly 90%. Many owners have advertised a discount of nearly 50% but still have no tenants.
The demand for tourism will continue to drop sharply this year, even during the peak summer season. Although the Covid-19 situation in Vietnam has been stable, the effects of the pandemic around the world are still very uncertain. The demand for international tourism will continue to decline and will be difficult to recover in 2020. Therefore, aside from existing international expats, and domestic tourists, investors of serviced apartments will have difficulties finding tenants, and will inevitably have to reduce rents.
CVR property experts point out that due to the oversupply of apartments available for rent in Da Nang, owners have to discount 10 – 30% in order to attract tenants. Current tenants will benefit from a wider variety of more affordable housing options. Owners will continue to struggle with finding tenants in the long term.
- The last piece of news worth mentioning reports: “EVFTA and EVIPA provide additional benefits to Vietnam’s economy”
The EU-Vietnam Free Trade Agreement (EVFTA) and EU-Vietnam Investment Protection Agreement (EVIPA) include important commitments on tax reduction, investment protection and trade facilitation.
The Vietnamese Government believes that this will help to increase export to the EU by 42.7% by 2025. Up to 71% of customs duties will be eliminated for Vietnam exports, such as textiles, electronics, shoes and agriculture, and Vietnamese exporters will have preferential access to the EU market, worth $18,000 billion.
At CVR, we believe regulations based on international standards in areas of business, trade, investment, intellectual property, and others are the basis for Vietnam to begin to restructure their economy towards modernity and efficiency amid huge challenges in an ever changing world.
As always, CVR is at your service and happy to provide help anyways we can!