The Complete Guide to Investing In Vietnam Property
VIETNAM PROPERTY INVESTMENT GUIDE
If you managed to raise some capital, then you probably know already that keeping them in a bank will not secure your future.
In case you are looking for a way to multiply your money and make an investment that is worth the effort, you need to exploit the benefits offered by the property market.
The Vietnam property market is extremely attractive at the moment, out of a variety of reasons, but you need to know something about it if you want to invest smart and enjoy a great return on investment.
The task is not an easy one, but with the right guidance, your money will be invested safely.
So, take advantage of the current guide that will take you through all the aspects of great interest when it comes to investing in Vietnam’s real estate market.
WHY INVEST IN VIETNAM?
Prices for properties on the mainland, such as the ones in Hong Kong, exploded, all this in the favor of nearby locations like Vietnam.
Driven by the desire to invest, but chased away by the high mainland prices, many investors are looking for new investment opportunities that are more accessible.
- The price of a Vietnam house is still very low
At this point, buying a Vietnam property will require a much smaller investment than compared with what you will find in Hong Kong.
So if you want to enjoy great profit with minimum investment, Vietnam is the answer.
- Foreign investors are welcome to put their money in new developments
While it is true that Vietnam’s real estate market opened later than other countries in Asia, it is now available for foreign investors as well.
Currently, Vietnamese developers are allowed to sell up to 30% of their developments to expat investors.
- The large cities in Vietnam already enjoy considerable increases in property prices
Large cities, like Hanoi and Ho Chi Minh City, recorded a spectacular growth in recent years, with metro lines in development that will be finished in the coming three years.
Because of this, the price of a Hanoi property, for instance, grew significantly in the past years and the trend is expected to remain the same.
- Vietnam could be the next world factory
As specialists noticed, Vietnam is following the same path China did a decade ago.
At the moment, Vietnam’s industrial sector is still developing, but it has very large changes to expand and increase in the coming years, attracting more companies and people in the area.
Samsung is one of the biggest companies that decided to open a factory in Vietnam, an example that will surely make other companies consider this country in the near future.
This will mean that very soon a high number of people will come to Vietnam to look for jobs.
- The rental yield is better in Vietnam
If we are to compare rental yields of Vietnam with those found in China or Thailand, the numbers are much better in Vietnam.
At the moment, the rental yield for high-end apartments is between 7 and 8%, and they are expected to grow.
For example, in just a few months, the price of an apartment in Ho Chi Minh City went from 6.9% to 7.3%.
This indicates that the growing demand is for real and forecasts announce more increases, of up to 10%, in the coming year.
- The local economy grows steadily
This year, Vietnam enjoyed a great economic improvement, reaching a GDP of 6.7%. So Vietnam has high chances of becoming a country of major interest in the area.
HOW MUCH ARE PROPERTY TAXES IN VIETNAM?
Foreigners can invest in Vietnam property market but they have to be aware of the existent taxes.
Thus, the cost of the investment will have to contain these taxes as well, if you want to have a true estimate of what it means to invest in this country.
So, when you decide to sell a property in Vietnam, you’ll need to pay a 10% VAT tax, regardless if you are an expat or local.
When you buy a property, you will have to pay 0.5% in order to obtain the ownership certificate on the property and its value.
In case of a resale, you will have to pay a personal income tax, which represents 2% of the sale value of the property.
If you want to rent a property, then you need to pay the personal income tax for rental income, you will have to pay 5% VAT and another 5% PIT on the revenue you are making this way.
In case your monthly income exceeds VND 1,500,000 due to rented properties, you will have to pay a business license tax, which is of VND 1,000,000, the approximate equivalent of $45 on a yearly basis.
There is also a very small administration fee required, but that won’t pose any issues when it comes to costs.
CAN A FOREIGNER INVEST IN VIETNAM?
On the 1st of July 2015, the Vietnamese government changed the Law of Residential Housing, which made the conditions more accessible to foreign investors.
So yes, you can invest in Vietnam as a foreigner, although there are some aspects you need to consider.
If you can enter Vietnam in a legal manner, then you are considered eligible for purchasing a property in the country.
Also, any legal entity that has headquarters in Vietnam and unrolls their activity in the country, have the right to purchase and invest in local properties.
A foreign investor, individual or legal entity, can buy and own both apartments and landed properties, like villas and houses in town.
But, when it comes to buying condominiums, a foreigner can own a maximum of 30% of the entire condominium.
Also, they should not exceed 10% of the total number of separate houses available for a project.
As a foreign owner, you can choose to sell, sub-lease, inherit, or collateralize your property in Vietnam.
When it comes to owning land, the rules are a bit more restrictive for foreigners.
You can’t buy land here, but you can lease it for a maximum period of 50 years. But, there’s a freehold lease in the case of foreigners married with a Vietnamese.
Foreign companies can also lease land in Vietnam, the period of the lease, including any extensions, will be mentioned, according to the case, on their investment certificates.
WHY BUY NOW?
Things are definitely changing for Vietnam, as the country is slowly becoming the hot spot of property investment in the case of Chinese investors and foreign investors, attracted by the country’s growing economy and future potential in the real estate market.
- Everything changed with the new Law of Residential Housing
Until 2015, when this particular law was changed, Vietnam did not exist on the map of foreign investors. But now that it is possible, the Vietnam real estate is acting like a magnet for investors that wish to cease the opportunity.
And the prices of properties are still extremely accessible, in comparison with surrounding areas, which makes Vietnam the newest hot spot for property investments in Asia.
- The country’s population is young, enterprising, and ready to spend
One of the reasons behind Vietnam’s economic growth is a young population that is capable of creating successful businesses and eager to spend the earned money on thing that will offer them a better and more comfortable life.
This also means that they love getting new residences, built according to the latest standards. At the moment, the demand for new apartments and houses is on the rise and will soon exceed the available units.
- The prices of residences grew steadily in the last 3 years
The increasing interest in Vietnam’s property market made prices go up in the past year. Thus, if a high-end condo had a price of $1,600 per square meter in 2013, three years later the same unit was sold with $2,500 per square meter.
Even so, prices in Vietnam are still very competitive, something you need to take advantage of if you want to avoid spending too much on properties.
For instance, a gorgeous apartment in a residential development sells for $41,656, a sum with which you won’t even be able to get a modest flat in Singapore.
- The rental yields are very attractive
In current times, the rental yield hovers around values like 7% and 8%, which are quite attractive in comparison with other property markets around Vietnam.
But things are expected to grow, as rents may go up, stimulated by the existent demand on the market.
At the moment, the secret is to invest in smaller properties, which aren’t just more affordable but also easier to rent, leading to even bigger rental yields.
- The middle-class is continuing to grow and to require mid-tier residential units
Vietnam has a young population, half of its residents having ages ranging between 15 and 39 years old.
They compose most of Vietnam’s workforce and lead to the creation of a bigger middle-class, which requires mid-range housing options.
The developers in Vietnam noticed this trend and started focusing on developing units according to these requirements.
According to some investors, the point of major interest when it comes to the value of houses can be found in sums ranging between $40,000 and $120,000.
- Vietnam is starting to attract more and more visitors
Besides an increased interest in the real estate sector, the hospitality domain also enjoys an increase in popularity in recent years.
A lot of tourists are looking to stay at hotels and resorts in Vietnam and their numbers are growing at impressive rates from one year to another.
For instance, the number of tourists recorded in 2016 was 26% higher than the one recorded in 2015, and forecasts show that things are not going to change.
In the first quarter of 2017, there were 29% more tourists in Vietnam than in the same period of the past year.
- The industrial sector is also growing, attracting new workforce
Some of the largest players in the manufacturing industry, such as Samsung, are interested in opening new factories in Vietnam, which means not only a better economy for the country but also more foreigners that will come here with work.
Samsung alone employed no less 45,000 workers at their new location in Hanoi and other companies may follow the same pattern.
No matter how you put it, Vietnam is not to expand in an extraordinary manner in the coming years.
- The infrastructure is also developing
When the economy is doing well, so will the internal infrastructure of a country. Vietnam is quite ambitious in this sector, preparing an investment of $20 billion in infrastructure only.
There will be new elevated roads that will cover 71 kilometers and a total of 5 brand new metro lines that will have a length of 106 kilometers.
The first metro line is expected to be completed and fully functional by 2020, this event bringing along new development changes for sure.
- The booms in the real estate domain will generate great profits with minimum effort
Many investors managed to earn considerable amounts of money by investing in Vietnam, due to the fact that the country is just starting to develop in this sector and the booms triggered by the rapid changes make investors rich in a rather short period.
So, if you are wondering whether now is the best time to invest in Vietnam property market, the answer is yes.
You should definitely take advantage of all the previously met conditions and start investing before the prices in Vietnam will align with the ones existent in Hong Kong, for example.
And this can happen considering the changes that occurred in Vietnam in a very short time, like the rapid increase in property prices, the high demand of new residences, and the economic growth of the country.
PROJECTS TO INVEST IN PHNOM PENH VIETNAM
THE RIVIERA POINT
The View Riviera Point, Ho Chi Minh City, Vietnam Riviera Point enjoys a 500 metres frontage of the Ca Cam River and will feature 2,400 waterfront apartments and recreational facilities, offering luxurious waterfront living right next to the commercial centre of Phu My Hung, an established residential township.
The View Riviera Point,is within walking distance to four international schools, the Royal Melbourne Institute of Technology, Franco-Vietnam Hospital as well as established commercial buildings and restaurants in Phu My Hung. The development will feature residential towers above a podium, and infinity pools overlooking the river and the commercial centre of Phu My Hung. A retail and food and beverage belt will be developed along the river promenade, allowing for al’fresco dining.
WHY INVEST IN THE RIVIERA POINT
The View Riviera Point is a gated development that comes with comes with 24 hour security. There will be 4 layers of security measures including a guarded community (security guard), Key card access, CCTV monitoring, and door lock. There will be an international standard management office and 100% power back-up generator. This development will come with full condominium facilities on different levels. Enquire now to know more in-depth about the development.
- Located in the heart of District 7
- minutes to established Phu My Hung Township comprising of an expatriate community, renowned international schools, restaurants, supermarkets, hospitals, financial institutions, and many more
- 15 minutes away from established district 1, which is the current Central business district
- 15-20 minutes away from district 2, accessible via Phu My Bridge
- Convenience at your doorstep surrounded by lifestyle entertainment and eateries
- International schools for the expatriate community including Korean, Japanese, Taiwanese, Canadian, Saigon South International School, and Royal Melbourne Institute of Technology
- Walking distance to Big C, and short drive away to Vivo City, Crescent Mall, and Lotte Mart
D1 MENSION VIETNAM
D1mension condominium is a prestigious development located in the heart of District 1 Ho Chi Minh City, Vietnam. DImension is developed by international developer CapitaLand, together with world-renowned property management company The Ascott Limited. Featuring a limited number of units, there will only be an exclusive 102 residential units to choose from, ranging from 2, 3, 4, and penthouses with various sizing. All units will come with quality interior fittings and fixtures such as marble flooring and designer kitchen by De Dietrich. Branded names including Villeroy & Boch sanitary ware can be found in the 2 and 3 bedder apartments, while ARMANI ROCA sanitary ware will be fitted in the 4 bedroom apartments.
WHY INVEST IN D1MENSION
- 20-years Experience in Vietnam (Capitaland). Prime Time tInvest (in peace of mind) with SG reputable developer.
- Strong Potential for Capital Growth.
- Strategically located in the administrative heart of District 1. 3 minutes texisting CDB.
- Word Class CondFully-fitted with high-end brands.
- Very Low Booking Fee S$2K. Low Upfront Payment from just 10%.
- Deferred Payment Scheme.
- Investor Friendly NABSD, TDSR, SSD, Capital Gain Tax.
SEASONS AVENUE VIETNAM
Seasons Avenue is the latest residential development, from renowned developer Capitaland. Conveniently located at New Urban Area Mo Lao, future residents will themselves within minutes walk to CGV cinema, Big C shopping mall and Coopmart Supermarket. Recreating Hanoi’s 4 seasons, Spring, Summer, Autumn and Winter, Seasons Avenue is designed to create an environment that future residents will feel revitalized each time they are home.
Seasons Avenue apartment Mo Lao, Ha Dong district
Seasons Avenue means “four season avenue”. The investors want to bring a project sealed with imprints of 4 seasons of Spring-Summer-Autumn-Winter, which is the characteristic of Hanoi. The project is a harmony of living space, green landscape and modern facilities, like the fullness of the 4 seasons in nature.
Seasons Avenue – The design is to create an ambience that the residents will look forward to be home. A combination of distinctive landscape character spring, summer, autumn and winter gives a unique sense of ambience that helps to revitalize the residents. The landscape design incorporated different colors, plant palette and landscape materials to represent seasonal changes of the leaves of different seasons. In addition, the transitional change of the season is shown via the transitional zone with the mixed use of materials and planting selection.
WHY INVEST IN SEASONS AVENUE VIETNAM
- Ha Dong District attracts Buyers by its Location + Affordable Prices = Larger Access to Secondary Markets because of Affordability!
- Ha Dong District well supported by Comprehensive & Synchronised Infrastructure Development! = Plans in Place to Make this District to a Thriving & Growing District= Adds Value to Investors’ Property to it Growing Well Establishments!
- Current Rental Yield 4% to 5% per year with 2 Bedroom fetching up to USD 900 per month! = Earn Passive Income + Make Your Money Work Harder for You!
- Owner Occupied 77% vs 23% Tenanted for CapitaLand Hanoi Property = Strong Domestic Market = Safe Entry & Exit for Investors!
- Foreign Tenants make up to 60%, mostly Korean, Japanese, Chinese, Singaporeans & Westerners! = Strong Tenant Market & Mix because of Hanoi’s Emerging Economy owning to Businesses tapping on Opportunities!
- Surrounded with Amenities eg Big C Shopping Mall, CGV Cinema, Coopmart Supermarket, Hospitals and Schools = Well Established Area to Start Up Families = High Demand for Such Accessibility!
- 1.5km away from Metro Line = Interconnected with residents who travel to work at Old & New CBD with Superb Convenience
- Wide Array of 60 modern and unique facilities = Easier to Rent/Sell because tenants/buyers seek out better lifestyle and value out from their renting/buying dollar!
- Quality of Project is Top Notch, with many innovative facilities – very rare in Hanoi! = Very Suitable for Upcoming and Growing Population especially “Viet Kieus” segment which are used to modern living lifestyle! = High Demand for Quality Project like Seasons Avenue!
- Award Winning Project : BCA Greenmark, Asia Pacific Property Awards 2016 & Vietnam Property Award 2016 = Talk of the Town Project, Everybody Knows!
- International Singapore Reputable Developer CapitaLand, 40% owned by Singapore Government + more than 20 years of experience in Vietnam = Invest with Confidence with Temasek’s Due Diligence & Experience in Vietnam Markets!