Buying real estate in Ho Chi Minh City
As Vietnams economic boom continues to boost it towards global recognition, the more appealing it has become among property shareowners. Up until 2015, the nation didn't allow foreign investment whatsoever. Despite property investment being a relatively new market for Vietnam, it has quickly become one of the reasons neighbouring countries have expressed such strong interest.
An overview of the real estate market
With the popularity and gentrification of Ho Chi Minh City has come supreme economic growth, but it also means that prices for high-end condos and villa compounds are on the rise, too. In fact, according to CBRE Group Inc., the prices for luxury property in Ho Chi Minh City rose by 18 per cent in 2018; it is estimated to average around $5,518 per square meter. Although these prices may seem steep, it's quite reasonable compared to similar space in Singapore, Hong Kong or Tokyo. With that said, now is an excellent time for expats to explore all their options.
Besides, Ho Chi Minh City is currently in the process of developing a rail system for residents and tourists. While there's no exact end-date in sight, it's been predicted by the commercial real estate professionals at CBRE that properties located within walking distance will immediately price appreciations up to 20 per cent as soon as the project is completed.
Procedures for buying property in HCMC
Just like anywhere in the world, expats should use caution when purchasing property in a foreign country.
Luckily for those interested, expats are now able to purchase multiple properties even on a tourist visa thanks to the Vietnamese Law on Residential Housing (LRH). One way to go about this is by setting up a foreign-owned company. The next step is to register the company and obtain an Investment Registration License from the Department of Planning and Investment (DPI) - this will help expats to legally buy and sell in Vietnam. Confirmation of this certificate generally takes about 4-6 weeks. Once that is complete, it's necessary to incorporate the foreign business through the DPI and acquire a Business Registration Certificate, which is estimated to take about 90 days. This option is ideal for people who are looking to let the property to renters or future buyers.
Expats who aren't interested in business ventures and would prefer to invest or buy in property individually may also take that route. So long as the expat is a resident of Vietnam, they will be able to purchase property for up to 50 years; this can be extended. By law, individual buyers are not legally able to rent out their property.
While expats are allowed to purchase property in Ho Chi Minh City, they are not allowed to own the land that it sits upon. Therefore, expats are only allowed to buy new and off-plan projects. The biggest listing companies in Saigon are Savills, Colliers, Visiup, Batdongsan, VIProperty and Tranio. Hiring a real estate agent through one of those mentioned above will make the process run a lot more smoothly.
The best areas to buy property in
Vietnam is currently one of the most popular places to buy property at the moment due to its low prices. According to the South China Morning Post, high-end apartments currently run around USD3,000 to USD 6,000 per square metre - a fraction of the price of surrounding countries.
Although the trends are constantly changing, the booming neighbourhoods are District 2, District 7 and District 4. Out of all of the neighbourhoods in Ho Chi Minh City, District 5 is still relatively cheap to buy, although there are not as many high-end properties being listed or built at the moment. District 1, also known as the Wall Street of Ho Chi Minh City, is currently the most expensive to buy in as it is a tourist haven and where most of the city's attractions are located. Despite the high prices, this is the top choice among affluent buyers.
Despite some chatter among housing market professionals, a new report shows that there's no real estate bubble that is about to burst in Ho Chi Minh City. The HCM City Real Estate Association recently found that the housing market in Saigon is 'lopsided,' meaning that there is more supply than there is demand. While only time will tell, the city's real estate market is certainly worth looking into if expats have the means.
