How do you invest in Vietnam real estate?

l3ully wrote:

phikachu wrote:

Someone help me explain this and if I'm wrong please correct me.

Lets say DELAFON who's been through the process of buying decided to sell his apartment in 10 years time. His Vietnamese neighbour also sold an identical unit at the same time.

A foreigner with money wants to buy a resale unit. The foreigner gets 40 years lease left if they buy from DELAFON who is another foreigner.  They get a 50 year lease from a Vietnamese national who had a longer if not freehold lease.

From whom would the foreigner prefer to buy a unit from?

if that's not how it works then my apologies... this is how they limit the resale market for foreigners and rig it in favour of vietnamese leaseholders.

As to my understanding, leases can be renewed once. Therefore this should not really matter, if procedures are clear.
I would worry more about the fact, that at western standards any aprtments reaching EOL. What does happen to the building after the live cycle is over?

Ok so I forgot about that. No one knows much about the process and how much the "nominal" fee is. I guess the unofficial fee would depend on how desperate you are. I did read somewhere that there is a timeframe and window of opportunity to extend the lease but it can only be done in the last year.

Non the less it's a valid point I made, no foreigner is going to want to touch DELAFON's apartment when they can buy from his neighbour without any of the hassle and ambiguity around extension of the lease.

Rigged.

Me, I'm trying to buy as Viet Kieu or get back my passport to do it... whether that's safer or worse I'm still weighing up my options.

Vietnam Government issued Decree 99/2015/ND-CP date 20/10/2015 from Chatter IV - article 74- 70 about Foreigner can owner Vietnam Properties.
You can buy  3-5 Bedroom Department and owner with red book 50 year. And before 3 month expiry date , you can apply extend your red book.
And please note: only the Department project which can accepted by GOV agreed to sell for foreigner, Department project only can sell 10% space for Foreigner and just buy one.
Foreigner can buy only Department which have >=3 bedroom , not a House, a shop-house..

update...
i have been trying to change the land use of my land from 'trees long years- cai lau nam' to industrial land -cong nhiep . On the title and master plan for the district , the zoning is industrial and last year the lawyer said it could be done, but the people at the local government said there is a hold on changing land use. But no one can tell me why and for how long.  There are warehouses on either side of the land and there is a small easement where the propose saigon -cantho railway is planned.
Does anyone have any experience with this?
I know , there is a push for transparancy around planning and government policy  but i can't seem to find out any information about my locality in binh chanh. The lawyer doesn't know either.
Also , if land is compulsory acquired by the government are they obligated to pay market prices ?

bizdeals wrote:

update...
i have been trying to change the land use of my land from 'trees long years- cai lau nam' to industrial land -cong nhiep . On the title and master plan for the district , the zoning is industrial and last year the lawyer said it could be done, but the people at the local government said there is a hold on changing land use. But no one can tell me why and for how long.  There are warehouses on either side of the land and there is a small easement where the propose saigon -cantho railway is planned.
Does anyone have any experience with this?
I know , there is a push for transparancy around planning and government policy  but i can't seem to find out any information about my locality in binh chanh. The lawyer doesn't know either.
Also , if land is compulsory acquired by the government are they obligated to pay market prices ?

I also have land where there is a note in the pink book that 15 meters should be left free for the future expansion of the road.  Should the road really be widened that much, I don't expect to get any real market prices for it.  They'll make some calculation that's probably far away from the market price.

However one must also consider that if the road is really extended to this extent, the market prices of the land parcels along this road will also rise.

With you a railway is built.  That probably drives the land prices more than a road.

Getting clarity from incompetent officials is not going to happen.

bizdeals wrote:

update...
............ The lawyer doesn't know either.
Also , if land is compulsory acquired by the government are they obligated to pay market prices ?

No, market prices, you simply can forget. If any compensation is paid, then you can expect this in similar to the tax table
Like :
A class road
B class road ...
and there are some local differences.
Generally it;s a very risky undertake, to buy any land where planning is on hold or even planning zone exist.A lot of the land is only "leased" (again different to a lease, it's a usage right in pretty sirt terms like 1-2 years, which might get even NOTHING, the contract runs out, not renewed.
You will need someone speaking pretty good legal Vietnamese, talking to a larger number of proprietors in the desired area, to get idea, what they actually have . Expect a fair number of them having nothing, just erected a fence and shed and others even fake or invalid certificates/yellow/pink or red books,
.
Only, where an area has recently fully developed you run a lower risk
I3ully

Hi,
Your land is  "Long life tree" "cay lau nam" . If you want to change to " Thổ Cư" House- warehouse ect..
It is up to the Local Government have land project or have enough land fund change  to other kind of land
Decree 43/2014/NĐ-Cp 15/5/2014 . Chatter III, Article 7 indicated authority to  make Project , plan to using plan.
or you can make the Land project was accept by GOV , which is fix all of term on Land Law at article 58, Item 3.
Land Project is project for Industrial zone, building factory , building warehouse, build the trading house ect.

If you have Vietnamese  or Viet Kieu, or have Vietnamese Wife/husband you can apply documents for change kind of land like Vietnamese.
If you are foreigner , You are not authority to property this land.
I

bizdeals wrote:

6. i thought the local authorities were lax about building permits or I could bribe them when they came around , so i put up a metal building without permits. 250mil vnd mistake.

Was that a one-time fine and you didn't have to pull down the metal house?

I had a house designed on the assumption that we could convert 300m2 of 650m2 of farmland into building land.
Unfortunately, only 150m2 were approved and therefore the house would not have fitted on the building land plot.
Everyone in my wife's family told me that it doesn't matter if the house is on the building plot or on the farmland plot. But as I have been misinformed by the dear relatives of my wife so often (they always know everything better, but are seldom right), I let it be clarified. There I was told that the house could not stand on the farmland plot. But if it were, it wouldn't be so tragic. I would simply have to pay a one-off fine of a 2-digit million amount (don't anymore remember the amount) and the whole thing is done.
Is that really the case?

In any case, I finally spent another 25 million dong on a new house design, so that the house now fits on the building plot.
For me it was just too risky with all the ambiguities and changes in the law.

I was threatened with a fine by government inspectors if i didn't pull it down the shed (which cost  250 million vnd to build). After ducking and weaving for a  month, i had to pull it down. Apparently , 10-15 years ago you could get away with it in that area, but recently depending on who is running the place it is impossible even if you are willing to pay a bribe.

Sorry, i don't understand exactly what you are saying.
My situation is  that on the master plan my area is zoned and allows for industrial buildings, there are warehouse buildings on both sides of the block but when i went to inquire about the paper work to change the land use designation to dat cong nhiep was told it can't be done. I was given no reason or a timeline.
So , is there anywhere else i can find out if there is a policy at the moment to freeze rezoning in that particular area or a change to the masterplan? i have heard of instances where this has happened elsewhere, where the local government will freeze rezoning and subdivisions for a period of time to dampen down property speculation, not sure if this is the case here.
As I have also read , that the hcmc is rezoning alot of the cities agricultural land for other uses as the city has run out of space to expand.

Sure building a house you can't own and does not comform to government regulations you paid for with your money and not the families money is no problem. Seems reasonsble and normal here.
Of course, I would buy into the same thing if that were the case in my own country. You buy it for me but I own it not you. If by chance the government comes along and says tear it down i swear I will say honey I am so sorry I thought you could do thst.

bizdeals wrote:

Sorry, i don't understand exactly what you are saying.
My situation is  that on the master plan my area is zoned and allows for industrial buildings, there are warehouse buildings on both sides of the block but when i went to inquire about the paper work to change the land use designation to dat cong nhiep was told it can't be done. I was given no reason or a timeline.
So , is there anywhere else i can find out if there is a policy at the moment to freeze rezoning in that particular area or a change to the masterplan? i have heard of instances where this has happened elsewhere, where the local government will freeze rezoning and subdivisions for a period of time to dampen down property speculation, not sure if this is the case here.
As I have also read , that the hcmc is rezoning alot of the cities agricultural land for other uses as the city has run out of space to expand.

I can't say anything about Binh Chanh.
In our case (Long An) the authorities are quite restrictive about land re-zoning.
Probably there are annual contingents or as you mentioned, the possibility to apply for rezoning is sometimes frozen in order to contain the rise in land prices due to speculation.
For example, only 150m2 of farmland has been allowed to be converted into building land.
And it was only allowed if we really build a house and not only re-sell the rezoned land.
In Binh Chanh this is perhaps similar.

You said:
"My situation is that on the master plan my area is zoned and allows for industrial buildings, there are warehouse buildings on both sides of the block but when i went to inquire about the paper work to change the land use designation to dat cong nhiep was told it can't be done."

You say there are already industrial buildings but you want the land to be rezoned to "dat cong nhiep" (industrial land). What is its current purpose?
If it's not already an industrial land , were the industrial buildings built without permission?

Maybe you can track down the authorities responsible for land use rights in Binh Chanh.
In our case (Ben Luc) there were 2 information offices right next to the authorities who could answer a few questions.

The master plan says that area is zoned industrial land, but inorder to MAKE YOUR LAND industrial land and hence be able to build on it, you need to lodge the particular paper work and pay some taxes (that can be deferred payment for 5 years).
One side of me is a big police warehouse and the other is another warehouse that i assumed has already lodged that paper work years ago. But when i went to do it, the lady at the counter said no can do and the lawyer said, well when i told you months ago that it could be done it could but now the rules have changed and i don't know why.

Wrong.

frogstomp wrote:

Wrong.

Do tell.   

frogstomp wrote:

Wrong.

Such eloquence!

This is the same person who a few months back uttered the infamous statement "Nail her if you can and then head for the hills."

He simply gets better with time.   

frogstomp wrote:

Wrong.

Very small on details. 😃😩

Andy Passenger wrote:

I'm sceptical about the Metro. I think the places where the first metro line passes are already too expensive. And if the metro continues with so much delay as before, the last planned line will not be completed before 2040 or later.
First line opening is scheduled for 2019. I never believe in that. I think alone the tests for the train safety system take half a year or more.
In addition, HCMC could financially overstrain itself with the entire Metro.

https://e.vnexpress.net/news/business/e … 60751.html

I think those who bought overpriced residential property on HCMC's planned subway lines will have to stay alive for a very long time to make a profit on the residential property they bought.

If I compare how fast the new BTS line to Don Mueang Airport is progressing in Bangkok, you can see how much lagging Vietnam is.

***

DELAFON wrote:

***

Available for rent or available for sale?    Is one of these the property that you described in post #230 as one you intended to rent for $1400/month?  That was back in May.  Have you rented it out since?

Is it possible that investment at the high end sometimes does not return as well as the middle, especially if apartments are often vacant for extended periods?

THIGV wrote:

DELAFON wrote:

Hi

***

Available for rent or available for sale?    Is one of these the property that you described in post #230 as one you intended to rent for $1400/month?  That was back in May.  Have you rented it out since?

Is it possible that investment at the high end sometimes does not return as well as the middle, especially if apartments are often vacant for extended periods?

He's been posting the same thing for months.

I guess he just wants to annoy us, or he's just confused.

Andy Passenger wrote:

He's been posting the same thing for months.

I guess he just wants to annoy us, or he's just confused.

He did seem pretty confident of the wisdom of his investments a year or so back.  My suggestion that mid-range priced apartments might be better investments than high end is still open for discussion.  To me, collecting $500 from a young local couple on an apartment that cost $30,000-$50,000 is probably still better than collecting nothing on an apartment that cost $130,000 because you can't find an expat able to pay $1400 because he has a cushy housing allowance from a multi-national corporation.  This is doubly true if the sales agent told you that you would easily be able to rent it out for $2000. 

THIGV wrote:

Andy Passenger wrote:

He's been posting the same thing for months.

I guess he just wants to annoy us, or he's just confused.

He did seem pretty confident of the wisdom of his investments a year or so back.  My suggestion that mid-range priced apartments might be better investments than high end is still open for discussion.  To me, collecting $500 from a young local couple on an apartment that cost $30,000-$50,000 is probably still better than collecting nothing on an apartment that cost $130,000 because you can't find an expat able to pay $1400 because he has a cushy housing allowance from a multi-national corporation.  This is doubly true if the sales agent told you that you would easily be able to rent it out for $2000. 

An apartment in Saigon for 50, 000 these days, would only get about 5 million rent a month. Rental returns are not that great, its the increase in value that is why they buy.

My friend bought a house in Vung Tau, in two years it has increased in value 70% and she has spent very little whilst collecting 170 million in rent. Apartments are a different story and I doubt I would invest in one.

I work in one of the international real estate company headquartered in Ho Chi Minh, of course a lot of times real estate agents would tend to overpromise rental yields and attractive capital gains so forth because they just want to sell you the apartment.

Working in Vietnam in this field definitely shed some shocking information to me since I did not know too much at the start. There's definitely a lot of stories people make up and it's very surprising when people just believe them so easily without getting to know what they are really getting into.

However, most of the people that have been in the market for long understands that it's a high risk, high return investment (depending on the projects and where it's located of course). Ultimately its really trusting your consultant for them to find the best solutions to all your problems, takes a lot of insider networks.

Happy investing everyone !

phikachu wrote:

Me, I'm trying to buy as Viet Kieu or get back my passport to do it... whether that's safer or worse I'm still weighing up my options.

Hi phikachu,
I'm also Viet Kieu and planning to buy a property in HCMC for retirement.
Do you mind telling me your decision  whether it's better to buy as a foreigner (me - Australian) or as a Vietnamese (ie to get back Vietnamese passport)

I'm new to this expat website, only found out accidentally when googled.

Thanks

Hello everybody,

Tet 2019...

Real Estate companies are still pretending.....
After 15 months following the Real Estate market in Saigon, I do not believe them, for sure!!!

Chinese funds are the main source of money for most developers in Vietnam. Due to economic difficulties in China, a good parts of these funds will be sent back to China...

In addition programs that have been delivered in Saigon the last couple of months are far from being sold out:
- Thuan viet programs in q2.... Huge issues... I know, I am one of the owner... One of their program is even kind of dead. No lights at all during the night... It is empty.....
- Diamond Island in q2.... Very small demand.... I am one of the owner...
- Swan Park in Dong Nai, 0 demand for a house I am selling overthere.....

An independent economist has published a very well documented article in the Saigon times recently. It shows very clearly Real Estate is going into a crisis mode in 2019!!!!

Do not buy now!
Wait a couple of months when prices will be going down and down...

My source for China is a high level expert in hcmc.

All what I say concerning my properties is true. I have the data from inside.
Would you like to try to sell my house in Swan Park?

Saigon times article (from Sai Gon Giai Phong)
- Date: 22/01/2019
- Title: "Tough 2019 forecast for property market"
All clear and convincing hard data are in this article!!!
......

Back in May you rather scornfully asserted the following when I suggested that we get back in a year and see how your investments were doing:   

DELAFON wrote:

Sure, come back in one year...
Like this there is more for us now...
Will be then to late to do the same for you...

You made several posts that told us all of what you had invested in and your expected rental returns.  As of October you seemed to have resorted to renting individual rooms.  https://www.expat.com/en/housing/asia/v … vietn.html


Now it seems you are singing an entirely different tune and it only took 8 months instead of a year.

DELAFON wrote:

An independent economist has published a very well documented article in the Saigon times recently. It shows very clearly Real Estate is going into a crisis mode in 2019!!!!

Do not buy now!
Wait a couple of months when prices will be going down and down...

So were those who said that the market was overpriced wrong?

Here is a link to the article cited by Delafon republished in Vietnamnet:  https://english.vietnamnet.vn/fms/busin … arket.html

One thing that I found interesting is that the sector breakdown in 2018 was 30% high, 45.3% middle, and 24.7% low end.  The article goes on to state that "[t]hese figures indicate unsustainable market development. The property market's development is only sustainable when it records a reasonable product structure, with the largest share going to the low-end segment, followed by the mid-end and high-end segments."  I doubt that many expats want to purchase low end, particularly for their own residence, but the market certainly needs to get back in balance.  There seems to be too much high end inventory which may make it the worst place to purchase.

THIGV wrote:

Back in May you rather scornfully asserted the following when I suggested that we get back in a year and see how your investments were doing:   

DELAFON wrote:

Sure, come back in one year...
Like this there is more for us now...
Will be then to late to do the same for you...

You made several posts that told us all of what you had invested in and your expected rental returns.  As of October you seemed to have resorted to renting individual rooms.  https://www.expat.com/en/housing/asia/v … vietn.html


Now it seems you are singing an entirely different tune and it only took 8 months instead of a year.

DELAFON wrote:

An independent economist has published a very well documented article in the Saigon times recently. It shows very clearly Real Estate is going into a crisis mode in 2019!!!!

Do not buy now!
Wait a couple of months when prices will be going down and down...

So were those who said that the market was overpriced wrong?

My thoughts exactly. I see now everything he was advised to do is coming to reality. I'm glad it's his money and not mine.

I must give him credit though. Takes a lof to come back on the forum and admit the reality of it all. I said then that this was a bubble waiting to pop. When it does there will be great bargains. But I rather sispect even then it will not be like a bust in a country that gas a regulated market and the people have common sense. Many of these people will set on dead money intil the structure iscin such decay and it loses more value. And like THIGV alluded to there is just far to much inventory in the high end. Who in the heck is going to buy it a up and what do they do with if they do. As rental property you should stay in the sweat spot which is the median income for the area.

DELAFON wrote:

Hello everybody,
Chinese funds are the main source of money for most developers in Vietnam. Due to economic difficulties in China, a good parts of these funds will be sent back to China...

I have a friend who owns a farm in China and recently he has been having a hard time sending money back to his family. They limit the amount you can send out per year per person. I'm sure there's shady ways and creative ways to send money out of China because the corrupt Chinese politicians need to send money for their kids, wives, mistresses in North America. Maybe this could be part of the reason for the slowdown in Chinese investments? Can't see a lot of Vietnamese buying $2+ million dollar houses in District 1.

Colinoscapee,

You get it wrong, again...
Why do you need to be always negative?

The situation I just described is another opportunity for me:
1. I keep my existing investments and do not loose anything, crisis history in this country show that the drop in the market will not last for ages!
2. I invest again when prices are down enough, not you?

DELAFON wrote:

2. I invest again when prices are down enough, not you?

That assumes that you presently have liquid assets or access to debt, or you plan to liquidate some of your EU assets.

I do concur that if you can hold on, you have not lost.  I have a friend who calls me every time the US equity markets dive and tells me how many thousands she has lost.  I always ask her if she sold anything.  When she says no then I remind her that she has not lost. 

Nevertheless, you don't seem to have made a plug nickel (US) or even a single sou (FR) in Vietnamese real estate.

DELAFON wrote:

Colinoscapee,

You get it wrong, again...
Why do you need to be always negative?

The situation I just described is another opportunity for me:
1. I keep my existing investments and do not loose anything, crisis history in this country show that the drop in the market will not last for ages!
2. I invest again when prices are down enough, not you?

Its obvious you have more money than brains.

My last two blocks of land I made 40% profit, a far greater return than what you are getting.

THIGV wrote:

DELAFON wrote:

2. I invest again when prices are down enough, not you?

That assumes that you presently have liquid assets or access to debt, or you plan to liquidate some of your EU assets.

I do concur that if you can hold on, you have not lost.  I have a friend who calls me every time the US equity markets dive and tells me how many thousands she has lost.  I always ask her if she sold anything.  When she says no then I remind her that she has not lost. 

Nevertheless, you don't seem to have made a plug nickel (US) or even a single sou (FR) in Vietnamese real estate.

Dear THIGF,

You must be a cousin of God, or... Buddha maybe...

Sorry to disappoint you, but.....

Short term, I am getting cash rent out of one of my investment....
This short term revenue is going to double in 2019 cause I rent another one too.....

Short term, I also have the option to invest again, yes!

Long term...... Just have to be patient, nothing else to do....

By the way, I first invested 100,000 usd in Real Estate in Europe back in 1990, I still have the investment and more than 28 years of rent revenues....

So, my friend THIGV, what are God and Buddha telling you now???!!!...

Takes one heck of a gain to recover from a 50% loss. One could wait a lifetime. This thread can be hilarious at times. Me I head for the hills when there is giddy exuberance, as there is in VN real estate and buy when the sky is falling from fear the world is coming to an end. But even then I would never be to inclined to invest in real estate in VN. Deflon is now making a killing renting out if buy and flip property. I bet he is nailing some really great rental returns. Invest 200k and rent for 1k a month.....you go for it Warren Buffet. Maybe when hand held calculators went out of style it screwed some folks up and they now have no way to calculate. But if an investment is great in their minds that is all that counts. I have many a friend here who are becoming wealthy buy VNese bonds, or bank CD's. At least in THEIR minds they are making a killing. Inflation can make us blind, it kind of creeps up on us without us realizing. But one can never escape the fact that dead money is dead money.

Vagabondone wrote:

Takes one heck of a gain to recover from a 50% loss. One could wait a lifetime. This thread can be hilarious at times. Me I head for the hills when there is giddy exuberance, as there is in VN real estate and buy when the sky is falling from fear the world is coming to an end. But even then I would never be to inclined to invest in real estate in VN. Deflon is now making a killing renting out if buy and flip property. I bet he is nailing some really great rental returns. Invest 200k and rent for 1k a month.....you go for it Warren Buffet. Maybe when hand held calculators went out of style it screwed some folks up and they now have no way to calculate. But if an investment is great in their minds that is all that counts. I have many a friend here who are becoming wealthy buy VNese bonds, or bank CD's. At least in THEIR minds they are making a killing. Inflation can make us blind, it kind of creeps up on us without us realizing. But one can never escape the fact that dead money is dead money.

Thanks a lot Vagabonde, you really make me laugh.
Easy, no need to discuss a lot.
Very simple: I have invested in RE, over time,  in Europe and Vietnam. My monthly recurrent Real Estate income is higher than my monthly spendings = I could go on an island for the rest of my life, doing nothing, just enjoying life...

DELAFON wrote:

Very simple: I have invested in RE, over time,  in Europe and Vietnam. My monthly recurrent Real Estate income is higher than my monthly spendings = I could go on an island for the rest of my life, doing nothing, just enjoying life...

Just a non-scientific personal opinion but people who are constantly chasing a buck (I will let you look up the idiom) are never satisfied living on that island, lying on the beach, doing nothing.